Are you headed for financial disaster?

Are you doing any of these top planning mistakes for your future and for your financial planning? I found that I am making some of those mistakes!! Good to take a good look at your financial picture no matter what your age!

1. Not having a goal and a plan for how to achieve it. You really need to know what you want and then decide how in the world you are going to get there! You need to have a focus.

2. Not being willing to change your behavior so you can get to where you want to be. Keeping track of your expenses for a month or two might shock you as to where your money goes! Very often, “the more we make, the more we spend.”

3. Not paying off your credit card debt each month. Credit cards are essential to our lifestyles but they certainly can be misused! “Having a balance on your credit cards is like trying to do the backstroke in quicksand. Pretty soon, you’re drowning.”

4. Making only the minimum payment on credit card debt. That’s a treadmill going nowhere! “ A $3,000 balance at 18% interest will take more than 22 years to repay if you pay the minimum!”

5. Failing to save at all or to save enough. Pay yourself first which can be done in a direct deposit into a high yielding money market or savings account. It is recommended that you have an “Emergency Fund” of at least 3 month’s salary in that account.

6. Waiting too long to save for long-term financial goals. Time can be your friend or your enemy for saving up for major goals like college or retirement. Put your savings on automatic pilot, having that savings amount taken out automatically before you see it.

7. Failing to take advantage of benefits provided by your employer, such as your 401K or life insurance. Such contributions to your 401K aren’t taxed until that money is withdrawn during retirement.

8. Not having any or enough life insurance.

“The probability of getting a flat tire while driving is a fraction of 1 percent. The probability of dying is 100%. Would you drive without a spare tire in the trunk? Then why wouldn’t you carry enough life insurance?

9. Over-investing in company stock.

You should have a well balanced portfolio. Remember Enron! Most financial planners suggest not more than 20 percent of your retirement money should be tied up in company stock. Diversify!

10. Letting emotion drive your investment decisions.

Check your excessive optimism at the door when you are investing. You need a well-rounded portfolio that will weather any ups and downs.


Summarized from Pamela Yip, Finance Writer of Dallas News / July, 2007