Pine Advisors Shares How to Avoid Financial Regrets in 2020

SHARE THIS

FACEBOOK

  DELICIOUS

  SU

  REDDIT

The New Year is often the start of a new financial chapter that you write for yourself. One of the most common New Year’s resolutions is to get your financial house in order. This means both saving money and getting yourself out of debt. However, once the calendar hits January, there are also various pitfalls that await you as you try to move in your situation. There are many different mistakes that you can make that you must avoid. These will lead to regrets about errors made and opportunities missed. Here are some best practices to implement in order to avoid financial regrets.

Know Your Financial Situation

This seems like a very basic piece of advice, but you would be shocked to know how many people really do not know the essential details of their finances. They may have upcoming obligations of which they are unaware or not even know the terms of repayment for some of their debts. This causes them to either spend unrealistically or not properly plan for the future. It is vital to take some time to study your own financial situation in depth, writing down notes as you think of things. This way, you understand some of the upcoming challenges that you may be facing and can prepare yourself for them. While not every unexpected financial challenge can be avoided, many issues do not have to take you by surprise with the proper forethought and anticipation.

Maintain Your Emergency Fund

One of the most polarizing debates among financial experts is whether you need an emergency fund, from our perspective, we come down squarely on the side that this is an absolute necessity. You may have an inclination to tap into your emergency fund for something other than exigent circumstances. Resist the urge to do that. In many cases, financial peril can be avoided if you have a proper emergency fund. Unscheduled car repairs and medical bills can be paid for from this pot and will keep you from having to go into debt when these arise. Not only should you avoid the urge to raid this fund but you should also continuously add a little bit after each paycheck. A prime source of regret is when you get hit with a surprise bill but did not do anything to prepare for it when your personal circumstances were better.

Take Steps Toward Your Goals

Pine Advisors will tell you that every person needs a financial master plan for both the short and long terms. You simply cannot leave yourself at the mercy of what may come in the future. While there may be circumstances that you require to play defense, you should still take some steps towards your financial aims during each year. Even if you take baby steps or can only move towards one or two things on your list, taking some action during the year is vital. Another large regret is when you have a goal and cannot put it into being because you simply do not have the money. Although sometimes this is unavoidable due to lack of resources or difficult financial circumstances, other times failure to realize goals simply comes from a lack of advanced planning. The first major steps are having financial goals and taking some action to help make them happen. Once you begin this process, the important thing is to continuously act according to your plan and not put it aside for any period of time. You only have a limited amount of time to work and save, and it is best to use that time to your full advantage.

Don’t Let Your Credit Cards Win

Credit cards are a fact of life. We need plastic in our wallet to finance our daily lives, but one of our biggest mistakes is when we live beyond our means thanks to credit card debt. The bills always come due, and in this case, they come due with a healthy amount of interest. To avoid regrets, you should refrain from taking on too much new credit card and keep up with your payments as they come due. Credit card debt can become like a snowball rolling downhill when you do not make regular payments. The interest payments will cause your debt to balloon and, once you fall behind on your debt, it is difficult to catch up to speed. Credit cards are there to help you when they are smartly used and you must figure out how to make them for you so that you are not working for them. Many financial predicaments start when people overcharge on their credit cards and do not immediately get ahead when it comes to making their payments.

Take Small Bites

Some Americans will make a mistake in taking on bigger obligations than they can possibly afford. According to Pine Advisors, you make a major purchase in 2020, do not bite off more than you can chew. Know what the monthly payments will be and how they will fit into your budget. When you make large purchases, be conscious of how they will impact your monthly financial situation. The last thing that you want is to be stuck with high payments on big-ticket items and unable to meet your bills. This will leave you in debt and struggling to get out of it. If you end up house or car poor, it can lead to some outsize financial regrets in the coming year.