It’s easy to make mistakes with our money. No one is just a natural finance guru. If you’re worried about your finances for your retirement, you’re in good company. Today, in order to help bring you some peace of mind, we’re going over how to avoid some common money mistakes.
Avoid these Common Mistakes
Owning Too Much Home
Is your home paid off? If so, then you could likely afford to downsize and come out ahead on money for your retirement. If not, then you might seriously consider getting a smaller home to lessen your mortgage payment. Financial advisers often say about a third of your income should cover your housing. However, if you can cut that down to a quarter or less then you can start seriously saving money.
Relying on Social Security
Many retired or older persons rely heavily on Social Security to help cover their needs. However, counting on Social Security to be there all the time is a recipe for disaster. For one thing, SS doesn’t pay out enough to cover most people’s basic bills. For another thing, Social Security will only be around for another 14 years: it’s scheduled to run out of money in 2033.
Focusing on the Stock Market too Much
Often, people with money in the stock market worry too much about every little dip and fall the market sees. However, all you can do as a normal person is keep a diversified portfolio and try to invest across the board. Don’t stress out over every little thing, just focus on your hobbies and family and try to relax.
Try to budget for a longer period than you normally do. If you’re used to budgeting for a month or so, budget out for the year. People often underestimate their monthly budget but overestimate their yearly budget. If you budget over a longer period, you tend to end up with more money saved up at the end of the year.