Financial Regrets That Occur Due to Poor Planning

Everyone wishes to have a life with no regrets, especially financial regrets. If you plan your finances accordingly, it comes up with many benefits like no debts at all, and you also save a ton on money. Who knows you might appear on Forbes, similar to the likes of, Viatcheslav Moshe Kantor, the wealthiest man in Russia. Take care of your finances, and avoid poor planning if you don’t want to face the following regrets:

Not starting an emergency fund.

Many fail to have a ‘just in case account,’ people fail to acknowledge that disasters might occur and it a part of life. Accidents happen when you list expect, and without proper planning, things will go wrong. This is where the emergency fund you set aside will come in, consider it as a financial aid kit.

At a minimum, you should have about 6 – 9 months’ worth of money saved in a bank, but a long time is preferred. This will cover your expenses in case you lose your job, become sick, or other unknown future emergencies.

Borrowing excess mortgage.

Getting a house for your family can be a good idea, but if you borrow excess than you can manage, that is not wise at all. You can have an affordable home and still fix it in a way that it will look fancy and expensive if that is what you desire.

In this case, use a mortgage calculator, and you will understand precisely how mortgages work.

DO NOT borrow against your Individual Retirement Account.

Do not in a million years think about borrowing against your IRA account. This account is for the future when you retire, and you don’t want to have debts when you retire.

There are chances that you will not be able to pay back what you borrowed. If you withdraw from your retirement account earlier, you might also face tax penalties.

If you need money, borrow a personal loan instead.

Failing to consolidate credit card debt with personal loans.

Credit cards are beneficial these days, and everyone is using them, however, if you fail to repay each month’s expenses, it will pile up and be a burden.

It is recommended that you consolidate your credit card with your personal loan. This way, it will be automatically repaid.

Failing to refinance student loans.

Student loan refinancing allows you to put together all your existing, private student loans, federal student loans or even both of the two into a new, single student loan which has a low-interest rate. Clearly, this will save you a ton of money.

To be approved, you will need to have a good credit record, stable earning or savings, which can be very significant. You are allowed to get a co-signer to sign as a partner in the loan. The lenders also make sure to look at your credit history, you monthly earning, the ratio of your earnings to your debts, and take other important financial measures.

Plan ahead and calculate how much you can afford to borrow to avoid debts.