When it comes to things that may pose a risk to your finances, there are certain activities that might immediately come to mind. Investing heavily in high-risk stock options, leaving your job without a backup plan, or habitually making large, unnecessary purchases are all obvious actions that can certainly cause your finances to take a hit.
But what about things you do in your everyday life? Surprisingly, common personal habits can also place your personal wealth in jeopardy. Some of these habits seemingly have nothing to do with money but can cause major impact in ways you haven’t considered.
Recreational Alcohol Consumption
When linking alcohol and financial risk, the obvious path is lawsuits or criminal charges from misbehavior. A danger that might not be as well-known, however, are long-term consequences stemming from traumatic brain injury. As it is estimated that alcohol is a contributing factor in approximately 50% of all incidents of traumatic brain injury, the habit of alcohol consumption can have very real consequences.
Brain injury can impact your finances in ways far beyond substantial medical bills. If you have a brain injury that causes permanent damage and causes you to be unable to work, your income could be a fraction of what you are accustomed to. While disability payments can provide meager assistance, these payments can take months to initiate and may need to go through several rounds of appeals.
Lack of Savings
Spending on a monthly basis at the top end of your monthly income doesn’t pose an issue until an unexpected expense arises. The problem with that is the fact that unexpected expenses are sure to come at one time or another. Whether it’s a car repair or water damage in your home due to a burst pipe, costs will arise that cannot be delayed.
Americans have become more conscious of having funds set aside for emergencies. However, approximately 51% have less than three months of expenses in savings. When unexpected costs arise, it is all too easy to fall into the trap of high-interest borrowing. This can come in the form of credit cards or payday loans. Unless you sharply adjust your monthly spending, you run the risk of spending long stretches of time recovering from the interest payments.
Continuing Subscriptions You Don’t Use
It can sometimes feel comforting to have the option to use something even if you decide not to. Signing up for that gym membership at the beginning of the year seems like a step in the right direction for overall health, but it serves no purpose other than a drain on your bank account if you do not use it.
Maybe there was a single television show you were excited to watch and signed up for a streaming service. After you finished watching, did you find something else on that streaming service? Does it show up as a recurring monthly charge on your credit card without being used?
Many services start off with an introductory free trial that requires you to enter payment information at the onset. This is a savvy business strategy since it’s very easy to forget that payment is due after 30-60 days. Even if you remember, you still have to take the time and effort to call or login to your account to cancel. If you don’t regularly check your credit cards and bank accounts for autopayments, you could be throwing away huge amounts of money on a monthly basis.
Whether you set a cap on subscriptions and other memberships within your annual household budget or just verify that you are using the ones you pay for, make it a habit to not throw away money.
Focus on the Day to Day
Financial hardship doesn’t always stem from fallout from failed business dealings or investment downfall. A great deal of success in over financial stability stems from day-to-day habits. To avoid unforeseen difficulties in personal wealth, it’s best to practice good habits and not take unnecessary risks.