Are you shy? 5 Signs You May Be Avoiding Wealth
Living beyond your means and accumulating high-interest debt are bad financial habits you probably know you should avoid. But there are subtle ways people destroy themselves on the way to riches.
People who are “money shy” – as in, they have a fear or discomfort with money – can take a money approach. Here are five signs that you’re hurting your wealth-building journey without realizing it.
1. You avoid checking your financial situation
People who are shy about money may avoid calculating their net worth and reviewing their financial statements and balance sheets, meaning they don’t know exactly how much money they have set aside for long-term goals like retirement. If you don’t know your numbers, it’s hard to properly plan your savings.
While you don’t have to (and probably shouldn’t) constantly check how much money you have, it’s a good idea to set aside some regular time, like once a month or once a quarter, where you check your financial goals and how close you are to achieving them. That way you can make changes if needed.
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2. You have trouble asking for more
Negotiating a promotion at work can be difficult, but doing so effectively can make a big difference in your bottom line. Try to get away from the idea that you shouldn’t ask for more by considering how much value you bring to your employer and asking for a reasonable raise that reflects how much you have to offer.
Remember that employers also have to deal with additional costs to find and train a new employee, so your employer may save money by promoting you instead of losing you to another business because you are afraid to ask for a raise.
The same logic can prevent you from communicating with services, such as your internet or phone plan. But in general, you can save more by shopping around or calling your provider and asking about less expensive options.
3. You don’t take risks
In general, you want to avoid pouring your money into speculative investments. But you also have to take risks to build your nest egg, like investing in the stock market. Some money-shy people keep their money in savings accounts for fear of losing it in the stock market, but leaving money in a low-yield savings account means you could lose money to inflation.
Although you can lose money in the stock market, financial advisors generally recommend taking at least some risk so that your money can grow. There are many cheap funds that make investing easy by mirroring well-known benchmarks like the S&P 500. Past performance is no guarantee of future results, but investing in the stock market is a time-tested way to reach your long-term financial goals.
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4. You don’t claim all your benefits
Understanding all of your options when it comes to Medicare, Social Security and retirement planning benefits can be difficult. But ignoring these benefits early on is often a mistake, as it means you won’t be able to take them into account when planning and assessing how much money you need in your nest egg for retirement.
Reviewing benefits can ensure that you don’t retire early and that you don’t work too many years. It also means you’ll use benefits like the company match to your 401(k) early, giving that money time to grow.
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5. You gift without proper planning
Giving gifts to loved ones can be a special part of holidays, birthdays and other occasions, but it requires proper planning. Giving money to friends, family and charities without first checking how that giving will affect your budget and savings can lead to financial problems down the road.
Map out how much money you have and how much you need to save to reach your goals, and set aside a certain amount of money to donate.
