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The Worst Money Mistakes You Can Make at Any Age
 
Financial Faux-Pas

Everyone makes mistakes with money. We don’t save enough, or we spend too much on something frivolous. We sell shares in a stock too soon or not soon enough. But there are also financial concerns that are unique to different stages of life. Avoiding them as you go along can save you a lot of stress (and money!) both now and in your next stage of life.  As you manoeuvre through life’s ups and downs, here are the slipups to watch out for in each decade.

In Your 20s: Spending more than you earn and not saving for retirement.

It's tempting to travel the world or buy a big car so you can feel like an adult. But most people in their 20s don't earn enough right out of school to afford those things. And if you can't pay for that stuff up front, you wind up taking on big debts that hold you back for a long time.

Instead, create a budget, or spending plan, based solely on your current income. Get used to saving for the things you want with the money you earn and avoid using credit cards except to build credit — and only if you can pay the balance off within the month.

In Your 30s: Combining your finances and delaying insurance.

During this decade, many women make the mistake of combining all of their income, investments and financial accounts with those of their spouse or partner. If those relationships eventually come to an end, they often end up less financially secure than they would have been if they had kept some of their finances separate.

A second mistake those in their thirties often make is neglecting to protect themselves with insurance. They often pass up the chance to buy life insurance at a low rate and delay the purchase of income protection insurance or trauma insurance.

If you are in good health, buying term life insurance in your thirties is dirt cheap and you can lock in low rates for 20 or 30 years.

In Your 40s: Funding university fees over retirement and not saving enough.

Many people in their forties are still busy spending money on the things they want right now — vacations, cars, and new houses — and delaying building up their retirement savings.

In Your 50s: Co-signing on a loan and getting too defensive with savings.

Once upon a time, when people turned about 55, most were worried about simply protecting what they had already saved. Now that many people are living well into their eighties and nineties, they need much more in retirement than they once did. That means simply preserving capital is not a sustainable financial strategy for people in this age group.

In Your 60s and Beyond: Underestimating the cost of future medical expenses and overlooking your income.

Many people focus on building their retirement funds until they retire, and then stop proactively building and simply start living off those funds. But vigilant retirees can continue to maximize their retirement funds and use them to continue earning income. The best retirement portfolios are not just giant pots of cash you draw down every time the bills are due. Rather, portfolios of income investments like stocks offer monthly or quarterly distributions that can act as a pay cheque of sorts in retirement as they deliver interest payments to investors. These kinds of income investments stretch your money and make it last longer, rather than force you to slowly bleed your piggy bank dry.

Source: Dailyworth.com