The Weight of Too Much Debt
Approximately 70% of workers with non-mortgage debt say their debt has impacted their ability to save for emergencies and retirement.
Your 20s & 30s
Being financially illiterate. By learning as much as you can about saving, budgeting, and investing now, you could benefit from it for the rest of your life.
Not saving regularly. Save a portion of every paycheck and then spend what’s left over — not the other way around.
Living beyond your means. If you can’t manage to stash away some savings each month and pay for most of your expenses out-of-pocket, then you need to rein in your lifestyle.
Spending too much on housing. Think twice about buying a house or condo that will stretch your budget to the max, even if a lender says you can afford it.
Overlooking the cost of subscriptions and memberships. Keep on top of services you are paying for (e.g., online streaming, cable, the gym, your smartphone bill, food delivery) and assess whether they still make sense on an annual basis.
Not saving for retirement. Start now and you still have 30 years or more to save. Wait much longer and it can be hard to catch up.
Not protecting yourself with insurance. Consider what would happen if you were unable to work and earn a paycheck. Life insurance and disability income insurance can help protect you and your family.
Not keeping your job skills fresh. Your job is your lifeline to income, employee benefits, and financial security. Look for opportunities to keep your skills up-to-date and stay abreast of new workplace developments.
Spending to keep up with others. Avoid spending money you don’t have trying to keep up with your friends, family, neighbors, or colleagues.
Funding college over retirement. Don’t prioritize saving for college over saving for retirement. If you have limited funds, consider setting aside a portion for college while earmarking the majority for retirement.
Using your home equity like a bank. The goal is to pay off your mortgage by the time you retire or close to it — a milestone that will be much harder to achieve if you keep moving the goal posts.
Ignoring your health. By taking steps now to improve your fitness level, diet, and overall health, not only will you feel better today but you may reduce your healthcare costs in the future.
Your 50s & 60s
Co-signing loans for adult children. Co-signing means you’re 100% on the hook if your child can’t pay — a less-than-ideal situation as you approach retirement.
Raiding your retirement funds before retirement. Dipping into your retirement funds will reduce your nest egg — a significant tradeoff for purchases that aren’t true emergencies.
Not knowing your sources of retirement income. As you near retirement, you should know how much money you can expect from three sources: your personal retirement accounts; pension income from an employer; and Social Security.
Not having a will or advance medical directive. These documents can help your loved ones immensely if something unexpected should happen to you.