When it comes to regrets in life, everyone wants to make sure they don’t have any. But the reality is that most people do have regrets –and financial ones are often the ones that could have been avoided. Our financial advisors in Joondalup have pulled together 5 of the biggest financial regrets to avoid.
Financial Regret #1 – Not Enough Savings
Whether it’s a small rainy day fund, long term savings, or even retirement savings, so many people just aren’t saving enough. If you aren’t sure how you’d replace your washing machine if it broke, or if you’ll be able to retire before you’re 70, it’s time to look at your savings seriously. Long and short term savings are both crucial to your financial liquidity.
Financial Regret #2 – Starting Superannuation Too Late
This is one regret that lots of people have and it is so easily avoided. From the moment you start working, whether full time or part time, get your superannuation started. With employers obliged to commit a minimum amount each year, this will get your fund off to a good start. As you grow older and have more disposable income, make your own contributions as well to top up your superannuation.
Financial Regret #3 – Relying On Credit Cards
If you’ve got more than one credit card with outstanding balances, you may end up with big financial regrets. As financial advisors, we understand the security that having access to a credit card provides, such as for major purchases where insurance may be useful, or in emergency situations. But they should NEVER be used for everyday spending. The more reliant you get on credit cards, the easier it is to rack up thousands of dollars of debt and you’ll only end up regretting it.
Financial Regret #4 – Poor Investment Decisions
If you’re unsure of where to invest your money, whether it’s paying off your mortgage, putting it into savings, topping up your superannuation or choosing some investment funds, consult a financial advisor. Do not go blindly into any investment decision if you don’t fully understand what you’re doing.
Financial Regret #5 – Not Budgeting Properly
At the root of most financial regrets is the failure to properly budget. Whether you’re single, in a couple or have a family, being able to manage your money and stick to a monthly budget is crucial to your financial security. Draw up a budget and always take your savings out before you allocate any remaining disposable income.