7 Deadly Sins of Personal Finance: Set Your Financial Soul Straight

by | Jun 16, 2016 | Personal Finance 101 | 0 comments

All of us sin and fall short, but we also have the opportunity to atone for our sins and right our course. When it comes to money, each of us falls into the 7 Deadly Sins of Personal Finance, so we must occasionally take stock and set our financial soul straight again.

Rose-Colored Glasses

Sometimes taking a sunny view of the world is great, but not necessarily when it comes to personal finance. If you think you are saving enough for retirement, you probably are not. Studies have found the most pessimistic savers are the ones most likely to meet their long-term financial needs. Creating an automatic savings plan is the best way to overcome your rosy-outlook nature.

Keeping Up with the Joneses

Do you have to have the latest smart phone, the shiniest car in the driveway, the fanciest kitchen gadgets? Well, stop it! Those new purchases will only make you happy until the new wears off or your neighbor buys a shinier car. Create your own discipline by planning and saving to make big purchases and making a list of pros and cons (heavy on cons) for such purchases.

I’ll Do It Tomorrow

Investors have $8 trillion languishing in bank accounts and only $900 billion in money market mutual funds. You may feel secure with that money in the bank, but it’s losing money against inflation and you will feel just as secure with it in a financial position that at least stays ahead of inflation.

Bait and Switch

Nearly as bad as languishing is the investor who is constantly watching the daily market and switching funds around to the new hot deal. Most of us aren’t stock traders and can perform better over the long term with a stable financial portfolio.

My Name Is Larry, and I’m Here to Help

Your financial adviser has just disclosed a conflict of interest regarding some advice. Oddly enough, a study by noted economic researcher George Loewenstein finds, you’re more likely to take the adviser’s advice just to prove your trust. Of course, you need to trust your adviser, but not to the point of following blindly without asking questions and protecting your best interest.

Show Me the Money

Everyone hopes to make a little more money on their investments, but measuring risk versus reward is vital when stock market remain volatile. Don’t feel ashamed if you feel safer with money in a stable environment.

Where Did I Put that Hammer?

Often our investments end up as cluttered as our junk drawer. As we change jobs, relocate, we tend to not take our money along (I’ll Do It Tomorrow). If this sounds familiar, now would be a good time to consolidate funds and bring some order to your financial soul.

Contact us today if you are ready to set your financial soul straight and sleep better at night.