When it comes to money and investing, there are several lessons many people wish they would have learned when they were younger. While everyone’s situation is unique, avoiding these six common mistakes can help you live life without financial regret:
1. Don’t wait to start saving — Homeownership, marriage, kids and retirement may seem a long way off when you’re in your teens and 20s, but the financial foundation you lay when you’re young is critical. If you work for a company that has a retirement savings plan, take advantage of it as soon as you can. You’ll be glad you did. Saving wisely from an early age enables you to turn time into money through the power of compound interest and long-term investing in the market.
2. Don’t just wing it; set a savings goal — It’s hard to know how much to save when you don’t know how much you’ll need down the road. Unfortunately, too many wait until retirement to figure it out and find themselves with too little savings, too late. A professional financial advisor can help you identify your long-term financial needs and lifestyle goals, and project how much money you’ll need at retirement to achieve them. Inflation and average market returns over time are part of the calculation. Knowing your retirement number also may help you make smarter financial decisions in your early years because you’re working toward a definitive goal.
3. Don’t forget to prioritize an emergency fund — Doing so can help alleviate the stress and aggravation that comes from unexpected expenses, such as a car or appliance repair. It can also serve as a resource for larger purchases if the desire or need arises.
4. Don’t buy a house you really can’t afford — There are many reasons why buying a home may be the right decision for you. If you’ve saved enough money for a down payment, have an emergency fund in place and plan to be in the house for five or more years, buying may be the way to go. Just make sure you’re not overextending yourself and going above your price range. By starting small — perhaps with a townhouse, condo or small home — and building up equity, you may be able to trade up over time if you so choose. It’s important to know that owning a property isn’t the right choice for everyone. For help deciding if ownership is a good fit for your current situation, use an online rent vs. buy calculator. Before purchasing, have a professional and reputable home inspector examine the property to identify potential risks or problems that may be deal breakers. Also, make sure you are in a location that offers unique attributes or is in demand to help increase the likelihood you can sell your property when the time is right for you.
Source : https://www.tahoedailytribune.com/news/opinion/the-six-financial-regrets-to-avoid/