Recently I came across an article that described several ways that we sabotage our own financial futures. Now, I don’t know about you, but I work too hard to be sabotaging all of my efforts. I wanted to know what this was all about. In the article, Josh Monroe, a writer for Kiplinger, describes 7 things that we all need to look out for. He says, not only do we sabotage our financial lives, but we also do things to impair our success in other areas of our life as well by doing things such as: Hitting the snooze button, when we know we should get up to head to the gym or get ready for work. I know that is one thing I need to stop doing. I wanted to know what could we possibly be doing to ruin my financial future So I can share it with you. Here are the 7 things we do that will sabotage our financial future.
Saboteur number 1
If you have ever made a purchase because you didn’t want to miss out, then you’ve fallen prey to the first of the saboteurs. When we spend money frivolously, we miss the opportunity to save. As Jon Acuff explains in his book, “The Compound Effect,” If you purchased a cup of coffee from the leading coffee place every day on your way to work. That $4.00 cup of coffee will cost you over $50K over a twenty-year period. Every dollar that we spend, is a missed opportunity to save. When we purchased that coffee instead of making it ourselves, (because we didn’t want to miss the double points Tuesday) we fell prey to this saboteur. Monroe calls this the fear of missing out. I really hope you enjoyed that $50K cup of coffee.
Saboteur number 2
The next action that we take that sabotages our financial future is making big purchases that have long term consequences. Such as taking out a $40,000 loan to fix a 1000 problem (yes, I actually did that). We borrow money to buy cars and other items. Really, if we simply take a breath and save, then we could better afford anything. When we realize the commitment we have made, it is usually too late. We’ve already tied up our biggest wealth-building tool, your income. This single action prevents us from being in a position to take advantage of other opportunities in the future.
Saboteur number 3
This next saboteur even I have caught myself doing. It is called lifestyle creep. This happens when we get a little extra money in our pocket, and we start spending “all willy nilly”. Before we know it, our increase is gone, used up by our lifestyle. Instead of saving or investing that raise, we increase our cost of living. Could you imagine how much money you would have saved if instead of spending each raise, you invested it? A friend of mine told me about one of his mentors, who over a twenty-year career, never took a raise. Instead, he increased the amount of his retirement investing by the amount of the raise, never falling prey to lifestyle creep.
Saboteur number 4
Next, focusing on the wrong priorities will sabotage our financial future. Here’s the thing. Being able to sustain an adequate standard of living in your golden years should be priority the number one. Right next to ensuring we can live today. Monroe explains that many people have put off or have used retirement funds in order to pay for kids’ college or to try to get out of debt. Please don’t steal from your future to fix your today. The truth of the matter is, there are many ways that we can help our kids go to college debt-free, without taking money away from our future selves.
Saboteur number 5
This next one is dear to me because it was the hardest lesson that I had to learn. We are sabotage our financial future by not playing financial defense. Now, what does that mean? When you sit down with many financial professionals, they will talk to you about strategies for investing in the market. Where to put your money to protect your future. Monroe calls this an offensive strategy. But this is only half the equation. A defensive strategy is protecting you now, so you can invest in your future. Such as having a three to six-month emergency fund, and adequate insurance coverage. This is a way to give you and your family peace of mind when a catastrophe hits, like a COVID-19 pandemic!
Saboteur number 6
This next one makes me mad! Too many times, I’ve heard people tell someone, the market is crashing, better get your money out. Chris Hogan, the author of “Everyday Millionaires”, says it like this. “people jump off the roller coaster too soon.” The stock market, like a roller coaster, goes up and down. It even sometimes has your stomach in knots. But when you get out of the game too soon, you make a temporary loss permanent. Don’t make a temporary situation permanent by pulling your money out of the market too soon.
Saboteur number 7
Finally, Monroe says we sabotage our financial future by trying to do it alone. Even I must admit that I don’t know everything. But I have a team of people that I trust, that can aid me in finding the right solution. We all need to have people we can trust in our corner. Including your significant other, an accountant, and a lawyer. These individuals will help you to see your blind spots and help you can stay on track. No one does it alone!
We are going to make mistakes. But let’s not let our mistakes ruin our financial future. By making some small tweaks, now, you can protect your financial future from these 7 financial saboteurs.
Resources
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7 Ways to Sabotage Your Financial Future
Corey Stokes 
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