Business Insider published “8 money mistakes the middle class keeps making” to focus on one economic group but these mistakes can be made by anyone no matter how much money they have. It is likely that the focus is on the middle class because the wealthy have enough and those who are impoverished have just enough to get by. Actually, anyone can find themselves gaining or losing wealth due to unexpected circumstances but if you follow sound financial planning principles, you can protect yourself from sudden losses.
Overall, we get messages from our culture about seizing the day. Yes, sometimes we take the philosophy of living in the moment and apply it to the wrong situations. When it comes to our money, living in the moment can mean that we are unwise about both present and future money management.
Business Insider points out the dangers of:
Not having an emergency fund. One mistake you may make is not putting money aside for emergencies. Business Insider reported that “Nearly half (46%) of us would struggle to cover a $400 emergency, according to a 2016 Federal Reserve report…” Whatever your normal expenses may be, things could become more difficult if you can’t cover an emergency. You may have heard various suggestions as to how many months’ of expenses you need—three, months, six months, twelve months or more. If you find those numbers daunting, don’t concentrate on that, just start to save for an emergency fund on a regular basis so you have something set aside.
Delaying retirement savings. Just as we tend to think we can save for an emergency that we can’t imagine, we also put off saving for retirement. Procrastinating on retirement savings can hurt you because the longer you save, the more you savings will grow. The longer you wait, the less time you have for your money to grow. Also, putting off retirement savings means that you assume that you will be able to keep your earnings at the same level or increase them as time goes one. There is no guarantee of this so you are better off if you start saving for retirement early on your working life.