April Fool’s Day is a day of trickery and merriment. But being foolish with your money is no joke.
Here are five foolish things you can do with your finances:
1) Rack up credit card debt. It may take you years and thousands of dollars in interest to pay off clothing or a restaurant meal you buy today with a credit card. It’s just not worth it.
2) Don’t save for retirement. I don’t care what the market is doing right now… you should not stop investing in your future. If you have a 401(k) you should be contributing at least up to whatever your employer will match, and after that look at a Roth IRA. The younger you start doing this, the better off you will be thanks to the beauty of compounding interest. I’ve heard people say they can’t afford to save for retirement. My response: how do you plan to afford to retire then?
3) Don’t have insurance, or not enough insurance. Just recently our local news told the awful story of not one, but two families whose homes were completely destroyed by fire. Both families had allowed their home owner’s insurance to lapse because they were trying to save some money. I’ve known other folks caught in huge financial messes because of lack of health insurance, disability insurance and car insurance. DO NOT SKIMP on insurance.
4) Don’t have an emergency fund. Credit cards are not for emergencies (see my first point about credit cards). Your home is not an ATM. Have money saved for an emergency and you’ll take a huge weight off any bad surprises that come your way.
5) Don’t take care of your health. It doesn’t matter if you have $1 million in the bank if you aren’t in good enough health to enjoy it. Keeping fit and at a healthy weight and minimizing stress in your life can help your bottom line and help you live a lot longer. What’s the point of saving for retirement, if you won’t be around to enjoy it?