A growing number of people plan on working for a longer time because they lack enough savings for retirement. Not that many of them don’t want to save ahead for retirement, but the world we live in is simply so demanding that they cannot help but work longer to lead their expenses. Even for those that are lucky enough to lead frugal lives, it’s not uncommon to find then struggling to save up for retirement. But as much as we love to blame our endless expenses, bailiffs like idem servicing, and other financial obligations for our inability to plan ahead for retirement, the fact remains that we are the worse enemy when it comes to taking care of our finances. Doesn’t sound like what you expected to hear? Well, that is simply the harsh truth. With the several government approved financial schemes we now have at our disposal, such as the IVA’s servicing, retirement 401k, and trust deeds, to mention but a few, it’s so surprising to see people still failing to lead a well-structured financial life. With that said, here are eight bad habits that have been killing your dreams of retirement for years now.

Not watching your expenses

It is quite hard to stop money leakage when you have no clue where your money is going. Our little daily purchases do add up to form a lump amount, but spending categories such as frequent dining outside, big grocery shopping, changing the clothes in your closet, costly hobbies, one-click online shopping, to name a few, can bust your financial budget faster than anything.

One of the major tenets of personal finance is spending less than you earn. To help you figure out what’s eating your money, you need to write down everything you spend money on for three months.

You want the latest ‘everything’ available

Staying ahead in fashion, tech, and deco trend will involve shelling out huge amount of money to stay in game. And these things are constantly evolving; this implies that you will constantly spend huge bucks on these, and it’s an endless cycle. The bigger issue striving to have the latest device available. But whom are you trying to impress…

You have the constant urge to upgrade

Most iPhone users want to upgrade to the newest versions as soon as it is available on sale. Only a few hold on to their phones until it becomes obsolete and probably stop working.

Spending a couple of bucks on your new devices yearly may not really be a hitch to your retirement plan. However, constant need to upgrade your technology, home, or even car may be a big hole on your financial plan.

Extending your upgrade cycle by two or more years can free up cash, which you can use to pay off debts or save for retirement.

Treating credit card debt as a fact of life rather than a hair-on-fire emergency

Life can be expensive but there is no excuse for using credit cards to support your lifestyle – vacation, travels etc. you can actually save up for that vacation, fun travel, or appliance.

A high interest credit card debt can ruin your financial life. Halt everything. Assess your income and expenses. Cut off every spending, put all savings plan on hold, and throw all your cents towards clearing your credit card debt until it’s no more.

You use low interest rates as an excuse to finance depreciating assets

Borrowing to invest can only be sensible when the expected return on investment is higher than the cost of the loan. But it’s an error to take out a loan (even a low interest loan) to fund consumables and depreciating assets. The act of borrowing from your future to pay for today’s consumption is a major killer of retirement plan. Beside the obvious reasoning of losing money in the long run, you also risk running into so much debts even if you have the best of strategies to write off council tax debt.

Most people are struggling to fund and prioritize their short-term goals. A good financial plan will help you identify what’s significant in both the near and far future and help you steer your savings towards the appropriate goal(s).

You’re too complacent

Doing nothing is often the best line of action when it comes to a volatile stock market, but financial lethargy can cost in certain other ways. Some of us can’t find $50 to save every month, yet we pay $10+ for bank charges every month, won’t walk half-a-block to save on gas, to name a few.

Sometimes a major life event or a wake up call needs to happen before we start taking our finances seriously. Once you find out how much complacency is costing you, you stand up and take relevant action.

You postpone retirement savings to a later time that often never comes

“We’ll kickoff our retirement savings once we’ve paid off our credit cards-line of credit-mortgage.”

There are so many ‘priorities’ competing for your hard-earned money. Sadly, retirement savings is easily put behind while dealing with more ‘important’ instant needs like big mortgage, double car payment, and some expensive seasonal hobbies.

Retirement is far away and you can save for later, right? Well, I fear that ‘later’ may never come.

However, have you ever heard of “pay yourself first?” it is such a powerful money tool.

Conclusion

It’s true; we do a lot to sabotage our own retirement dreams. The good news is that it is never too late to take control of your finances and saving for retirement. Kickoff by fixing bad financial habits. Save enough and you can retire on your terms.