Do bad money habits constrain your financial progress?

Many people fall into the same financial behavior patterns. If you sometimes succumb to these financial tendencies, now is as good a time as any to alter your behavior.

#1: Lending money to family and friends.

You may know someone who has lent a few thousand dollars to a sister or brother, a few hundred to an old buddy, and so on.

Generosity is a virtue, but personal loans can easily transform into personal financial losses for the lender.

If you must lend money to a friend or family member, mention that you will charge interest and set a repayment plan with deadlines.

Better yet, don’t do it at all.

#2: Spending more than you make.

Living beyond your means is a path toward significant debt.

Wealth is seldom made by buying possessions; today’s flashy material items may become the garage sale junk of the future.

#3: Saving little or nothing.

Good savers build emergency funds, have money to invest and possibly compound, and aim to leave the stress of living paycheck to paycheck behind.

If you are not able to put extra money away, there is another way to get some: a second job.

Even working 15-20 hours more per week could make a big difference.

#4: Living without a budget.

You may make enough money that you don’t feel you need to budget.

In truth, few of us are really that wealthy. In calculating a budget, you may find opportunities for savings and detect wasteful spending.

#5: Frivolous spending.

Advertisers can make us feel as if we have sudden needs; needs we must respond to, or ones that can only be met via the purchase of a product.

See their ploys for what they are. Think twice before spending impulsively.

#6: Not using cash often enough.

No one can deny that the world runs on credit, but that doesn’t mean your household should.

Pay with cash as often as your budget allows.

#7: Inadequate financial literacy.

Is the financial world boring? To many people, it can seem that way.

There are great, readable, and even, entertaining websites filled with useful financial information. Reading an article per day on these websites could help you greatly increase your financial understanding.

#8: Not contributing to retirement plans.

The earlier you contribute to them, the better; the more you contribute to them, the more potential compounding you may realize on any growth of those invested assets.

#9: DIY retirement strategy.

Those who save for retirement without the help of professionals may leave themselves open to abrupt, emotional investing mistakes and other oversights.

Few people have the time to amass the knowledge and skills possessed by a financial services professional with years of experience. Instead of flirting with trial and error, see a professional for insight.

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Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155. MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.