Let’s Face It
All of us have made money mistakes, but not all financial mistakes are created equal. Age plays a major factor into the consequence of the financial mistake. Why? Age determines how much time is left to fix it before the consequences become greater than just losing money. At ELP Budgeting Services, “just losing money” is a big enough reason to kick these poor financial habits to the curb before the clock strikes midnight on December 31, 2020.
45: The Magic Number
In our experience, we’ve found that people ages 45 and under are the most likely to make these 10 mistakes, but ELP Budgeting Services has a proven solution for each common mistake.
1. Not maxing out retirement plan contributions
The time to realize you didn’t save enough for retirement is decades before retirement. People aged 45 and under are more likely to not maximize retirement contributions because there is a false sense of security in “I still have time”. “Catch up” payments aren’t a thing for no reason, but unfortunately compound interest doesn’t catch up. The sooner this mistake gets fixed, the better.
ELP Solution: GEN-WEALTH Budgeting Program
2. Buying a car you can’t really afford
The ability to “afford” the monthly payment does not equate to the ability to afford the car. People aged 45 and below are likely to live with car payments indefinitely by leasing or buying a car and leasing or buying another when the previous term ends. These monthly payments chew away at wealth generation opportunities.
ELP Solution: Affordability Analysis
3. Living with debt
People aged 45 and under are more likely to accumulate debt without thinking twice. Americans carry a total debt burden of over 12 TRILLION dollars! It’s no wonder so few people truly experience wealth. “The single most dangerous obstacle to building wealth is debt.”
ELP Solution: Debt Cancellation Budgeting Program
4. Not saving for your children’s college expenses
A small monthly sacrifice mixed with consistency can position your children for a legacy of wealth. It goes beyond graduating college debt free. Without student loans, children can save as soon as they earn a salary. Furthermore, a college savings allows children to invest early, maximize retirement contributions, and pay cash for large items. Do your children a favor and save for their future.
ELP Solution: GEN-WEALTH Budgeting Program
5. Eyeing and buying a house you can’t really afford
Like number 2, “affording” the monthly payment does not mean the house is truly affordable. A house is affordable when the monthly payment still allows you to maximize investments, save, and live without acquiring more debt. A good rule of thumb is to keep housing payments less than 25% of your net income.
ELP Solution: Affordability Analysis
6. Not investing outside of a retirement plan
An excellent solution to avoid debt acquisition is to invest outside of a retirement account. Brokerage accounts and real estate investing are just two avenues of investing that generate large amounts of cash. The cash generated can be used to fund expensive needs without penalty at withdrawal. Furthermore, why not take advantage of every avenue available to build wealth while you sleep?
ELP Solution: Investing 101
7. Investing too conservatively
At 45 and under, you likely have at least 20 years left to work. Twenty years is plenty of time to recover from market dips. On the other hand, high risk investing after age 45 may not only be unwise, but may not leave enough time to generate sufficient money for retirement. If you’re ages 45 and under, now is the time to invest with high risk and hope for high reward.
ELP Solution: ELP University
8. Little to no wealth protection measures in place
If you’re 45 and under you’re likely to believe you have many more years to live and live healthily, leaving estate planning, insurance, final preparations and everything in between, unaddressed. We sure hope so, however that’s not always the case. The time to be prepared for life’s unexpected turns is why you’re young, vibrant, and healthy.
ELP Solution: GEN-WEALTH Budgeting Program
9. Keeping up with the Joneses
No trend and no friend is worth going into debt. Act your wage and stay the course on your financial goals. Who cares if you don’t have the latest car or the biggest house if your retirement accounts are maxed out, you’re debt free, and your kids are set? Now that’s a flex!
ELP Solution: Debt Cancellation Budgeting Program
10. Not tracking your spending by following a budget
If you’re ages 45 and under you are more likely to haphazardly spend on entertainment, wants, food and yes, unnecessary items for your children. Every dollar must have a job if you want to achieve generational wealth. Our budget plans do just that. Make your money work for you, not the other way around.
ELP Solution: Standard Monthly Budgeting Program
Don’t Delay
If you currently find yourself making any of these mistakes, commit to fixing at least one before the end of the year. Not sure how to make the necessary changes? Let us do the heavy lifting and help you Earn. Live. Plan.
