Have you ever heard the phrase, "Hindsight is 20/20"?
It means that what you should do might be unclear when you're in the middle of a situation, but when you look back later in life, what you should have done is crystal clear.
As far as life lessons go, regret is a harsh teacher.
So what can you do to avoid regret in your life? We probably shouldn't give you advice on relationships and your health, but we are definitely qualified to give you financial advice.
Here are five of the most common financial regrets that people have—and, more importantly, how you can avoid having these same regrets in your future.
Not starting to save for retirement early enough.
One of the most common financial regrets people have is not saving for retirement early enough in life. When it comes to investing for retirement, time is your best friend. The earlier you start saving for retirement, the longer you have for your money to grow. Starting to save for retirement when you get your first job is ideal, but the second best time to start saving is right now. Come talk to us at CommonWealth One about how you can automate your retirement savings and retire with a sum that will support all your dreams and goals in your golden years.
Accumulating high-interest debt.
High-interest debt is the worst kind of debt. Not only are you paying off the debt itself, but you're paying a lot of money for the privilege. That money you're spending on interest could be working for you, instead, by boosting your retirement savings, emergency fund or saving up for something else. Avoiding high-interest debt is a smart move at all phases of your life. You can avoid high-interest debt by using credit cards judiciously and paying them off promptly, keeping your credit score up so you qualify for lower-interest loans, and by living within your means.
Not having an emergency fund.
This is one you won't regret until the day you need it! It's important to have a few months of living expenses saved up for an unexpected car repair, shockingly high medical bills, or a job loss. We hope you never have to use your emergency fund for any of those things, but you'll really regret not having it when you need it. Be sure to save up enough for a rainy day and put it in a place where you won't touch it.
Delaying homeownership.
One common regret among people who are approaching retirement age is that they didn't buy a home earlier in their life. While it may feel like a stretch, buying a home instead of renting is usually a smart financial move. Instead of paying rent to a landlord, you can pay that amount to yourself by building equity in a property. The longer you hold onto that property, the better off you'll be financially later in life. Even if you don't think you can buy a house right now, it's worthwhile to come talk to one of our mortgage professionals about what it will take to get you in a position to buy next year or the year after.
Lifestyle creep.
One of the hardest things to do is to avoid lifestyle creep. Lifestyle creep happens when your lifestyle grows along with your salary. The more you can afford, the more you spend. But when your income goes down, often during retirement, it's really hard to cut back on the things you got used to having or doing. You can avoid lifestyle creep by stopping, thinking and consulting your budget every time you get a raise, a promotion or a bonus. Remember to think twice before buying a nicer car than you need, a bigger house than you need, or starting the habit of hitting the coffee shop every morning.
Not understanding more about money!
Money is complicated! There are so many investment tricks, tax-saving strategies, trust and estate plans, life insurance hacks and more that can make your money work for you over time. Even if your income is modest, your retirement could be amazing if you do the right things at the right time. The best thing you can do is team up with someone who knows more than you, starting with any of the financial advisors and professionals at CommonWealth One. With money, knowledge truly is power!
Hindsight may be 20/20, but we know we can help your foresight be just as clear. We're here for you, for life, and we want to help you avoid financial regret as much as possible. We look forward to seeing you soon in a branch, on the "Learn" tab on our website, or on a free webinar.
