15 Financial Failings That Will Prevent An Early Retirement

Nov 21, 2013: For those of us who want to retire comfortably and do so while we still have the energy to enjoy our free time, personal vices must be kept to a minimum. Eliminate or at least put off indulging in bad habits that will cost you money in both the short and long term, and you will reach your goal of a relaxing retirement that much sooner.

Some of these weaknesses, such as smoking, heavy drinking, or any other practices that negatively affect your physical health, are easy to identify (even if they are often very difficult to eradicate).

However, flaws in other aspects of your lifestyle can be harder to recognize, though just as damaging to your goals. The following financial foibles can easily prolong your working life. Learn to identify them and do your best to avoid them; soon you’ll be sitting on the beach with a drink in your hand and enjoying your golden years while you’re still young.

1. Forgetting your budget: Living beyond your means will keep pushing your retirement further into the future. Set a frugal budget and stick to it so that you can be rewarded in the end.
2. Buying too much: Collecting unnecessary clutter will not only cost you at the cash register, but will mean purchasing a bigger home or additional storage space to house your possessions.
3. Not shopping around: Making impulse purchases or rash decisions on big-ticket items can result in expenditures that are higher than necessary.
4. Gambling: The house always wins. Period. Save your money until it’s no longer a concern, then celebrate your early retirement with a week in Monte Carlo.
5. Dissing disability: Speaking of gambling, not purchasing adequate disability insurance is playing games with your financial future. If you are unable to work for weeks or months due to injury or illness and don’t have adequate insurance, you’ll lose your shirt.
6. Not preparing for a rainy day: One of the first things that you should do to protect your fiscal viability is to set aside three to six months’ worth of living expenses in an emergency fund. Failure to do so can result in serious losses caused by borrowing money to pay off unexpected expenditures.
7. Not planning your shopping: Make a list before you head to the store and you won’t end up with six bottles of ketchup in the fridge. Figure out what you’re buying before heading to the store and you’ll avoid unnecessary purchases.
8. Shopping on an empty stomach: Plan your weekly trip to the grocery store to take place just after you’ve eaten and you won’t buy more than you need. This small change can save you hundreds of dollars over the course of a year.
9. Carrying a credit card balance: You will flush hundreds or even thousands of dollars down the drain in interest rates if you carry any significant balance on your credit cards.
10. Paying just the minimum: This calculator from Bankrate.com will help you determine just how much this bad habit can cost you. Consider yourself warned.
11. Forgetting about your credit: Ignoring your credit can cost you hundreds or even thousands of dollars in increased interest payments. There is no excuse to not keep tabs on your credit report when you can get your credit report for FREE each year at annualcreditreport.com. Check out these quick tips for building a strong credit.
12. Being too proud to seek assistance: Let your creditors know if you are going through a rough stretch; they could save you hundreds of dollars in fees and interest by devising an alternative temporary payment plan.
13. Ignoring the small stuff: Spending a few dollars a day on coffee is nothing, right? Actually, small daily habits can add up to thousands of dollars a year in expenses, so keep track of them just like you would any other budgetary costs.
14. Putting off saving: Time is your friend when it comes to planning for retirement, so take advantage of all the time that you have. Start saving today rather than putting it off until tomorrow and your account will swell all that more quickly.
15. Putting off investing: Returns on your investments won’t do a thing for your retirement if you have nothing invested. Build your portfolio from as early on as possible and your money will work harder and longer than you ever will.

Image Source(s): iStockPhoto

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