Skip to main content

Three Spending Habits That Could Affect Your Retirement

Motley Fool recently identified three spending mistakes that are common in retirement.

Many retirees have a trend for falling into financial traps that could reduce their retirement income significantly, according to Motley Fool. These traps include buying things just because they’re on sale, not paying attention to the little things, and spending extra money just because they have it. Find out more below.

1. Buying things just because they're on sale

S-A-L-E! Who doesn’t love that word? The psychology of the sale makes it easy to get caught up in it. According to Psychology Today, sales shift our focus toward what we’re saving rather than what we’re spending.

If the item is something you really need and will use, of course it’s logical to take advantage of the discount. But if you’re purchasing it with the hope of using it later, then you’re spending extra money that could add up quickly.

According to a survey by Slickdeals, the average American spends around $450 per month on impulse purchases. That's around $5,400 per year, or $324,000 over the average lifetime (and assuming you become financially independent at age 18). Nearly 2/3 of those who shop impulsively said they do so because they got a good deal on the item, and 40% said they have purchased something on impulse simply because they had a coupon.

According to Motley Fool, if you put that $5,400 per year you may be spending on impulse purchases toward your savings, that money could dramatically affect your retirement. For example, if you save $5,400 per year in a retirement account earning a 7% annual rate of return, then in about 30 years, you'd have saved around $510,000.

2. Not paying attention to the little things

You may justify spending money each month on "little" costs, thinking that $10 here and there won't hurt. But these costs can quickly add up, and before you know it, you're spending hundreds of dollars per month on "little" things.

If you could save an additional $100 per month by cutting out the little things that you don’t really need, then that money could go further than you may think when you invest it in your retirement fund. By saving just $100 per month earning a 7% annual return on your investments, you’d have accumulated around $113,000 in savings over 30 years.

3. Spending extra money just because you have it

It’s tempting to want to treat yourself to a special vacation or the newest technology gear when you get extra money from a tax return or a bonus at work. There may be no harm in occasionally splurging, but be mindful that you’re possibly doing so at the risk of your retirement.

It’s not easy to save for a comfortable retirement regardless of how much money you earn. The more you make, the more you spend, according to Nielson Insights—so making a lot of money doesn’t always equal a secure retirement. But if you're consciously wasting money on things you don't need, these bad habits could end up costing you thousands of dollars and an uncertain financial future.

You can read the complete
 Motley Fool article here.


Popular posts from this blog

What happened when a Trump Supporter Challenged Me About the Wall

Vicky Alvear Schecter wrote in Medium | Poltics on Dec. 27, 2018 using her headline above. I thought it was pretty well written -- at least she made an attempt to keep her liberal bias out of it -- regardless of a few illogical fallacies

But she does make an attempt, in an effort to avoid her liberal bias, as she ponders  " order not to be accused by bias, I explained that I would only use conservative sources to prove my point."

To me, that's bias to start out with that premise. And I believe her premise is that she is against the wall. That's her stance. But she makes some good points, but some are skewed, even though she attempt to take a "conservative" approach, even by citing some "conservative" sources in her footnotes.

Here's the first problem: if she wanted to avoid bias, why not just stick to the the historical facts as written (when you can find them without bias), and not concern oneself with bias. "I must reject that becau…

Weekly wrap for Nov 9

After Thursday and Friday, it might seem the markets are down, but the weekly numbers tell a different story, with the three major indices up for the week. The Nasdaq, with its tech exposure, had the smallest increase. The tech sector is obviously under recent pressure. 

IndexNov 2Nov 9+/-%S&P 5002,723.062,781.01+ 57.95+ 2.12%Nasdaq7,356.997,406.90+ 49.91+ 0.67%DOW 3025,270.8325,989.30+ 718.47+ 2.84%
Over the last 12 months, the Dow is up 10.77 percent, the SP 500 up 7.6 percent, and the Nasdaq up 9.7 percent.  

The weekly chart of the SPY still indicates a long position in the broader market. (The blue line is the 34-week moving average; the red is the 13-week moving average).

While the U.S. economy still seems to be just fine from most reports, investors seemed to worry about a couple of things on Thursday and Friday: 1) The Eurozone, 2) trade with China, and 3) the Fed and interest rates. Another topic of interest has been oil. 

First, it seems that the Fed has really not indicated …

U.S. Top Oil Producer, Thanks to Obama

\ You read that right.

The U.S. is now the largest oil producer in the world, according to the EIA, producing some 15 million BOE per day, surpassing Russia and Saudi Arabia. (Remember back when Jimmy Carter said in 1979 the answer to our energy problems was to wear a warmer sweater...but you probably don't. He actually said this on national TV).

The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world's production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the No. 1 spot, which it has held for the past four years running. (Source: Investopedia.)

Guess who takes credit for it? Granted, this increase in production began in 2012, but only because of private industry and the fact that the price of oil was at nearly all-time highs. And it dipped in 2016 because of Obama's anti-oil policies! 

But here he is again

Former President Barack Obama sure l…