Financial Taboos to Break in 2015
There is never a bad time to examine yourfinancial habits and look for good ones to keep and bad ones to break. Getting rid of bad financial habits can help you save money now and keep you from wasting money in the future. With that in mind, let’s look at some financial taboos that you should aim to do away with in 2015.
Don’t Charge Purchases When You Have Cash If you have the cash to make a purchase, it is almost always better to do so. While you may be able to earn rewards and other perks by using a credit card, you never know if you will actually pay off the bill when it comes due. If you experience a financial emergency or don’t have the willpower to keep that money set aside to pay off your credit card later on, you could find yourself paying hundreds of dollars in interest just to buy a pack of gum or some new shoes for your date this weekend.
Stay Away From Your 401k While borrowing money from your 401k may seem like a good way to consolidate debt or obtain cash to pay for a medical expense, it could cost you now and in the future. If you lose your job, you may be required to pay back the loan in full. You should also consider that you lose any ability to earn compounding interest while the money is out of your account. For those who have no other options, it may be better to declare bankruptcy instead of drawing from your retirement account as those are protected during such proceedings.
Are You Putting Money in the Bank? In addition to your retirement, you should be putting money in the bank or in an investment portfolio that you can draw from immediately if necessary. Those who don’t have an emergency fund of at least two months should put money into such an account before spending money on a vacation, a new car or upgrades to their home. If you have children who are asking for financial assistance, do not help them unless you can afford to do so without jeopardizing your own financial future.
Nobody is perfect when it comes to how they spend their money. However, you can learn to become smarter with your finances and make decisions that preserve your financial independence. Remember, always use cash when possible and don’t use retirement funds to help you out now as there may be nothing left later on.
This post was repurposed for distribution. To read more news and updates from Jeff Ramson, go to http://www.proactivestrategies.net