Expert Report: Bad Money Habits

Expert Report: Bad Money Habits

Podcast: Play in new window

Subscribe: RSS

We all have bad habits.

Some procrastinate. Others are extremely disorganized. But what are some of the bad financial habits that are holding back Americans from achieving their savings and investment goals.

Today, I’ll tell you the worst habit all savers and investors face and the best way to overcome it.

But first, think about where you learned to manage money. You likely learned about your finances at home or from watching your parents or older siblings.

Only 16.3 percent of the 16 million high school students across the country in 2017 where required to take a personal financial course to graduate.

In 2015 the consumer protection bureau reported that parents were found to be critical in forming their children’s financial literacy.

When parents have bad money habits, they pass those habits along to their children and that’s according to a study from asset management firm T. Rowe Price. If you are a parent here are three good habits to instill in your children to give them a good financial start.

• One, have your children research student loan options to understand impact those decisions will have on their future.
• Two, have them get a credit card and pay the balance due every month to build early credit. Do not have them turn away minimum wage jobs, especially if it is in their chosen profession. This will give them experience and income.

Now as promised, what’s the worst financial habit for parents and children alike? It’s called instant gratification. Many people young or old are guilty of this because we all live in a world where we want everything, and we want it now.

This is why time and time again, investors get burned on the stock market because they refuse to follow the cardinal rule of investing – buy low, sell high. They never sell. They are always after bigger gains and more gratification.

Now, the best and simplest way to overcome this is to exercise discipline and delay gratification. Don’t get sucked into the possibility of instant gratification in gains today that can disappear tomorrow. That’s gambling.

Find an investment that is guaranteed to grow your money and never step back. That is piece of mind.