You May Need Damage Control

Can’t find money to invest into your retirement plans?  Could you possibly be careless with your money?

Are you making typical financial blunders?  You may be but don’t know it.   Read about the top financial blunders that others are making so that you can avoid them.

The Top 5 Financial Blunders You Must Avoid

#1 – Debt Crushes Retirement Plans

  • Financial blunders and retirement planning

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    Credit card debt wastes extra money

The best way to find extra money for your retirement investments is to stay away from credit cards.  Avoiding credit card debt will save you money.

Only allow yourself to use credit cards if you can pay down the balance to zero every month.     If you can avoid carrying credit card balances you can invest the hundreds of dollars that you save in interest and fees.

  • Bad financial moves

Bad money decision:  using your credit card to make your auto loan payment.

Bad money decision:   shopping online.   You waste your money and increase your debt by shopping online because it is so easy to over spend.   With the convenience of the internet you can buy almost anything today and pay for it tomorrow with credit cards.

#2 – Find Money|Downsize Your Lifestyle

  • Your home is your castle

If your home has become too big, you are overpaying on taxes, utilities and maintenance.   Downsize to a smaller home, invest the money that you save on home expenses.

  • Your car, well it’s just your car

Car size has become an issue recently due to the price of gas, insurance and maintenance; downsize to save money on those things.   Maybe even consider downsizing from two family cars to one.   Save money by taking public transportation if available.

Part of downsizing your lifestyle includes comparative shopping.  You may not think home and auto insurance premiums drain your extra monies, but they do; find extra money by shopping your insurances every 6 months.

#3 – Allowing Market Chaos To Stop You

  • Steady as she goes

financial blunders and market volatilityMarket fluctuations should not stop you from investing.   Make a commitment and stay the course.   You miss opportunity by telling yourself that you will just get out until the market recovers.

Avoid jumping in and out of the market.   Markets go up and down; if you jump in and out, you may buy back in at the wrong time and completely miss the market upswing.  If market volatility makes you nervous, dollar cost averaging might ease your worries.

Dollar cost averaging is when you invest a set amount of money on a regular basis thereby averaging out the prices paid per share.   Investing for retirement is a long-term process, dollar cost averaging helps your investments grow slowly over the long-term.

#5 – Ignoring Investment Fees

  • Fees add up.

Load vs No Load Mutual Fund

Review your retirement investment statements regularly for your rate of return but also the fees you are charged.

You may not think too much about a 1 or 2% fee, but you should.   The difference between buying a load vs no load mutual fund could be that 1 – 2% difference.  That is a 1 – 2% reduction in the growth of your investment…that’s a big deal.

Your Retirement Plan At Work

You may feel that you don’t have to check your retirement investment fees because all of your investments are through your retirement plan at work.  Check them anyway.   The investment companies who provide your retirement plan are in business to make money, and they make their money through fees.

Brokerage Accounts

When you use a broker to make your trades, that broker also makes his/her money through fee.  Ask what their fees are before you make your trades.

Mutual Fund Company Direct

One of the least expensive ways to invest is to work directly through a mutual fund company, the fees are generally less.   But be sure to ask what the fees are before you invest.