When it comes to financial education the truth is that most people from around the world do not really know much. The financial situation you are in will always be a combination of all the decisions that you made in the past. There is a huge possibility you did not learn much about the topic so learning as you go along is something that is necessary. You will make various bad choices and the truth is the following are those that can be considered as being the worst, according to financial experts at Infographics Graphics.
Using Savings To Pay Off Debt
When your debt is around 20% and you have a retirement account that is now making 4 percent you can be tempted to use the savings to pay off your debt. This is a bad idea since it is really easy to withdraw the funds while it is complicated to pay back retirement funds. You could borrow some money from the retirement accounts but it is a much better idea to look for other available options. In the event that the retirement fund is the only option available, the trick is to continue your life as if you were still in debt. This allows you to continue saving and get to a stable financial situation.
Not Having An Emergency Fund
We naturally want to think that nothing bad is going to happen to us and if this is the case our money will be enough to deal with it. Most of the households simply live from one paycheck to the next while the unforeseen problems can easily turn into a disaster. Financial planners always recommend that you have an amount equal to 3 months of expenses in a checking account so that fast access is possible. You never know when you can lose your job or something unexpected happens, like an accident.
Not Having A Budget Or A Plan
You do have to take time to do budgeting. It is boring and many think that it is not possible to go into debt. In reality, your financial future will be connected to what is done right now. It is not at all difficult to spend a few hours per week to check finances. The idea is that you always have to be aware of exactly where you stand so you do not spend too much in the near future.
Lack Of Insurance
Most people are not insured because they think that this is useless or that nothing bad is going to happen in the future. We never expect death or medical conditions. Insurance is here in order to protect us and the ones we care about. When living alone without dependents it is possible that no insurance is needed but whenever being a part of a family, it needs to be taken into account.
Not Taking Additional Income Options Into Account
In life we have no guarantees to when something will end. We have to invest money into different sources in order to protect ourselves in the future. Be sure that you consider every option and you invest so you can have more money.