Thursday, December 2, 2021
Cash FlowHow to Avoid Common Personal Finance “Blind Spots”

How to Avoid Common Personal Finance “Blind Spots”

-

Are your personal financial “blind spots” getting in the way of achieving your financial goals?

“When you have a blind spot, you don’t realize until something blindsides you,” says Mark DiGiovanni, a certified financial planner in Grayson, Georgia.

Financial literacy is required to provide long-term security. To put DiGiovanni’s thought another way, when it comes to long-term money management, “what you don’t know can hurt you a heck of a lot.”

Accredited financial counselor Bret Anderson of Morrison, Colorado, has spent much of his career helping folks get back on their feet, and he has also advised high-wealth clients. He says five things – in folks who are well-off, as well as those who are struggling — frequently predict who will manage money successfully.

Two habits — saving and investing — are crucial, he says. Good money managers also:

  • Know how credit works.
  • Have a plan to build wealth and pay off debt.
  • Know what passive income is and how to create it.

If anything on that list is unfamiliar to you, those are some of your personal financial blind spots and a great starting point for your financial re-education.

The experts like Anderson and DiGiovanni say you don’t need to become a “walking financial encyclopedia” overnight. There are things you may never need to know or that you can learn when they become relevant. Examples include:

  • Financial consequences of big life changes, such as marriage, divorce, parenthood, or retirement.
  • Refinancing a mortgage.
  • Rent vs. buy decisions.
  • Saving for college.
  • Mandatory retirement withdrawals.
  • Income tax implications of side jobs.

Before you add complexities, just start with the basics, be sure you are:

  • It’s an essential habit.
  • If you don’t have a formal budget, check online for help creating one.
  • Planning for emergencies. You can’t prevent unexpected expenses. But an emergency fund, excellent credit, insurance — or all of those — can keep them from devastating your finances.

While no one wants to make a mistake, the costliest one may be waiting until you have “extra money” or feel more confident about financial decisions. The sooner you start identifying your financial blind spots, deal with them, start saving and investing, the more compound interest can grow your wealth.

“People don’t understand the time value of money,” DiGiovanni says. “Every day you postpone is another day you will have to work.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Why Your Organization Needs to Increase Emotional Intelligence

The amount of talk has greatly increased about the need for emotional intelligence (or EQ) in the workplace. Many...

How to Motivate Your Employees To Get Vaccinated

Many businesses have discovered that there is strong pushback against getting vaccines by some employees – even among front-line...

Financial Tips for Recently Engaged Couples

Many "milestone" moments in life were put on hold thanks to the coronavirus. With large gatherings banned for a...

Should You Have a Job During Retirement?

Is it a good idea to keep working a job during your “retirement?” Here is what the experts say. Many...

Five Things You Need to Know Before Shipping

When you need to ship a large quantity of goods or need more storage space quickly – a shipping...

Should Your Small Business Invest in Stock?

One way that your small business may be able to survive difficult times – or make a greater profit...

Must read

You might also likeRELATED
Recommended to you