7. You do not have an emergency fund.
Jeff Rose, founder of GoodFinancialCents.com, listed his top four biggest ways people hurt themselves financially:
“Not knowing how much debt they really have and how much interest they are paying.
Not having nearly enough cash savings in emergency funds. Not recognizing they need to save for retirement. Being oblivious to what is going on with their credit history. That’s as simple as requesting your free credit report and making sure all your information is correct.”
Why are emergency funds important? Think about this. If something bad happens to you or to a family member, of maybe just someone dear to you, and you have no emergency fund to turn to, what do you do? Right. You borrow money. You get a personal loan so you could shoulder medical expenses or whatever emergency financial need you have at the moment.
Now, you have a debt. And more often than not, this debt will just continue to grow because more often than not, we do not learn from the mistakes we do: not having an emergency fund. And with a debt, it would simply be even harder to establish an emergency fund.
Note: Emergency funds are usually worth three times to six times your monthly paycheck.
8. Saving money is not your priority.
“In my own life, I saw the biggest financial stagnation when I wasn’t paying myself first, even when I had a nice-paying job,” said personal finance expert Philip Taylor of PT Money. “When you get paid, make sure you are saving those first few dollars for your future.”
“Do it automatically each pay period, and you’re more likely to stick with it,” he said. “You get ahead financially by making savings a priority.”