10 Ways Your Financial Choices are Wreaking Havoc on Your Life
Are you wondering if your Financial Choices are Wreaking Havoc on Your Life? If so, you are not alone.
Making poor financial choices cause hardship such as not being able to pay your bills on time. Possibly, barely getting by, living paycheck to paycheck.
In fact, according to U.S. News, “Around 64% of Americans are living paycheck to paycheck.”
Furthermore, according to Nasdaq, “51% of Americans with 100K or more in annual income live paycheck to paycheck.”
If you find yourself in a position where every month is a financial struggle, then making a few tweaks may help you get ahead financially.
Below is 10 Ways Your Financial Choices are Wreaking Havoc on Your Life.
1. Paying Late Fees
One way your financial choices is wreaking havoc on your life is by paying late fees.
Not paying bills on time leads to late fees, which can add up over time.
Not only does not paying your bills on time lead to late payments but if not paid before the next month is due can make it even harder to pay your bills, as you now owe two months rather than just one.
Getting caught up with late bills is extremely difficult if you are already struggling to pay the bare minimum of what is due.
If you struggle to pay your bills monthly, then late fees will only worsen your financial situation. Therefore, making it essential to pay the bills on time.
2. Having Bad Credit
A bad credit score indicates that you are unreliable in paying your loans on time or not at all.
Since lousy credit equals high risk, lenders will charge higher interest to cover any debt you may not pay.
Bad credit is terrible because it will cost you more interest when getting a loan. Higher interest makes the monthly payment higher for a car, home, or credit card loan.
Furthermore, higher interest will make purchasing the car, home, or any items on your credit card cost more than it has to since you are paying more on the loan with a high-interest rate.
Bankrate has a mortgage interest calculator that allows you to see how various interest rates will make a difference in the cost of a monthly house payment.
The mortgage interest calculator is a great tool to help see how different interest rates can make a difference in the monthly payment and the total cost of the loan’s lifetime.
To see the total cost of the lifetime loan, click on the Amortization tab on the Bankrates mortgage interest calculator page.
2. Having to Much Debt
If you have a ton of debts, you’re likely paying a lot in interest. Therefore, it is vital to start paying off your debt quickly to save on interest.
The snowball effect is one of the most popular ways to start paying off debt. [Read also: Get Out of Debt | How to Pay Off Loans Fast]
The snowball effect is paying off the smallest debt first, then taking that payment and putting it toward the next debt until you are finally debt free.
4. Spending Money on Unnecessary Items
Sometimes it feels good to buy things we want even though we may not need them. Every once in a while, it can be okay to splurge and buy yourself something you want but do not need.
However, when impulse purchasing is a regular occurrence, it may cost you.
Impulse purchasing is when you go to the store to get one thing and end up with several items that were not on your list.
Such as going to a retail outlet to pick up a blouse and leaving with a cart full of unnecessary clothes.
Impulse purchasing is spending money on unnecessary items that are later forgotten. Buying unnecessary items can include clothing, make-up, home decor, or the latest gadget.
Often, impulse shopping feels good at the moment, only for the item to be forgotten within days or months after purchase.
Therefore it’s a good idea if you find yourself wanting something to ask yourself if it’s something you need or something you like.
If it’s something you like, wait a day or two and see if you still want it.
5. Put Money into Retirement
If you are not actively investing in retirement then this is another way your financial choices are wreaking havoc on your life.
Although putting off retirement may seem like a great idea at the time, it is something that you should consider carefully.
Regularly contributing to your retirement will allow you to leave the workforce when ready.
If you decide to skip contributing to your retirement account, ensure it is in your best interest long-term.
6. Only Giving Your Kids the Best
Putting yourself in debt to give your child the best of everything, from electronics, name-brand clothing, or gaming systems, is another way your financial choices may wreak havoc on your life.
If you have the money to spoil your kids, that’s great; however, if you are in a ton of debt, not able to put money into a retirement account, or could use that money to pay off a high-interest credit card, then spoiling your kids may not be the best option.
It is for this reason that only giving your kids the best of the best made it on our list of Financial Choices Wreaking Havoc on Your Life.
Rather than buying the latest and the greatest for your children, it is better to pay down debt and put it away for retirement to secure a better financial future.
7. Racking up Credit Card Debt
One big way your financial choices are wreaking havoc on your life is if you have a ton of credit card debt. Credit card debt can have a high-interest rate that can cost thousands of dollars annually.
The golden rule is that if you don’t need it, don’t put it on a credit card. Putting unwanted expenses on a credit card will cost more by accruing interest on those items.
Racking up large sums of credit card debt can be overwhelming and may become hard to pay off. Thus, causing your purchases to become a long-term burden.
8. Not Having a Budget
Budgeting is crucial as it helps you manage money by knowing where it is going.
Budgeting is when you analyze how much you make, set aside the appropriate amount needed to pay bills and food, and put aside retirement, gas, and any other monthly needs—then use the remaining money for things you may want.
Budgeting will indicate how much you have left over after paying the bills and purchasing necessities such as food and gas.
Budgeting helps determine how much extra money is left over so you can use it towards paying down debt, investing, or buying things you want.
9. Not Investing Your Money
Skipping investments is another way your Financial Choices are Wreaking Havoc on Your Life.
Not investing your leftover money at the end of each pay period makes it harder for you to grow your wealth.
After all, if you are able to set aside $200 into investments each month.
By the end of the year you would have $2,400 saved and within 5 years that is $12,000. That is not including the interest that occurs on your investments.
In addition to having a retirement account, investing your money is a wise idea. Investing your money allows your money to grow through compound interest.
Growing your investments is an excellent way for your money to work for you and not you working for your money. Furthermore, most retirement accounts have an age requirement to pull your funds.
If you want to retire earlier, investing your money in additional accounts that can be accessed anytime without penalty fees may be a great idea.
10. Overspending on Big Ticket Items
Not shopping around for big-ticket items before purchasing can cost you over time.
Oftentimes, doing a little bit of research can save you tremendously on big-ticket items such as furniture, cars, electronics, and appliances.
Many places carry the same items at different costs. With a bit of research, you can score yourself a great deal.
[Read also: Things I Wish I Knew Before I Bought My First Car]
Another way you can overspend is by buying expensive items that end up breaking, needing repairs, or not lasting. It is always a great idea to read reviews.
Ensure reviews are from those who purchased and not from individuals who are paid to review the product or a part of a promotion.
You will likely get more honest reviews from someone who paid for their big-ticket item than someone who got it for free.
In conclusion, if you struggle to pay bills or live paycheck to paycheck, you are not alone. According to U.S. News, around 64% of Americans are living paycheck to paycheck.
Below is a recap on the ways to improve your financial situation by making a few adjustments:
- Avoiding late fees, improving your credit score, and paying off debt quickly.
- Learning how to budgeting, invest your money, and being mindful of your spending habits.
- Being responsible to pay bills on time to avoid late fees
Understanding how your financial choices are wreaking havoc on your life allows you the ability to make changes to improve stability.
Remember, every little bit counts and small changes can make a big difference in the long run.
Full List of 10 Ways Your Financial Choices are Wreaking Havoc on Your Life
- Paying Late Fees
- Having Bad Credit
- Paying to Much in Interest
- Spending to Much on Unnecessary Items
- Overspending
- Not Investing in the Future
- Don’t Have a Budget
- Don’t Stick to a Budget
- Not Investing Your Money
- Overspending on Big Ticket Items
About Author, Sara Elizabeth
Writer, Amora V Lifestyle
Co-Owner of Elizabeth Besich Boutique
Sara is a writer for Amora V Lifestyle and is Co-Owner of Elizabeth Besich. Sara previously worked as a Marketing Manager and has her Master’s from Lindenwood University.
Sara studies everything of interest, from psychology, recipes, finances, mental health, and travel, thriving to find happiness and to live a good life.
When not learning, Sara loves all things outdoors, food, and hanging around great company. Furthermore, Sara loves spending time with family, who she is blessed to have in her life.
Note from the author: Through my articles, I hope to bring you joy and peace and that you enjoy it!
Disclaimer: The information provided in this opinion article is for entertainment purposes only. It should not be construed as financial advice and does not constitute an offer or solicitation for investment. We cannot guarantee the accuracy or completeness of the information presented, and readers should always conduct their own research and seek professional advice before making any investment decisions. The content of this blog is the opinion of the author and should not be attributed to any organization or entity. Any reliance on the information provided in this blog is solely at your own risk. Any reviews or comments written are the subjective opinion of an Amora V Lifestyle member and not Amora V Lifestyle. Amora V Lifestyle performs occasional checks on commentary left by users. It’s worth mentioning that we may also use comments in our articles. By posting a comment, you are giving us permission to use it in our content. Please check out Privacy Policy and Terms of Use for full disclosure. Source: https://money.usnews.com/credit-cards/articles/how-many-americans-are-living-paycheck-to-paycheck
Leave a reply Cancel reply
About Author, Sara
Let Us Be Friends
Trending Posts
About Amora V Lifestyle
Links
Advertise with Us
Contact Us
Get Featured
Report an Error
Media Kit
Follow Us on Google