Everyone has the potential for wealth. However, you might be engaging in habits that are limiting your wealth potential. Here are 5 things you might be doing to limit yourself:
- Spending too much. This one seems obvious, but it’s good to have a reminder. And it’s not just about spending more than you earn. Even if you are living within your means, you might be spending too much. Think about your purchases. Are you really going to get good use out of today’s must-have item? Sure it’s alright to enjoy yourself every once in a while, but habitually buying things you don’t need and/or use will catch up to. That money could be better used for investing, saving or paying down debt. Just spending it is a waste that can keep your from enjoying even greater rewards in the future.
- Keeping extra money in your checking account. Have a pretty good over-run each month? Do you continually carry it over in your checking account? If so, points out Jeff Rose at Good Financial Cents, you are limiting your wealth potential. Unless you have a rewards checking account, you aren’t earning a return on that money. Instead, put it in a high yield savings account, some sort of bond fund or even a CD ladder. Just put it somewhere that earns a return for you.
- Refusing to make a plan for your money. You need a plan for your money. Without setting goals, or having an idea of how to grow your wealth (and a plan for doing so), you will miss out on a number of opportunities. Reaching your wealth potential requires that you make a plan for your money, capitalizing on achieving the best possible returns.
- Skimping on your tax-advantaged retirement accounts. Now is not the time to skimp on your tax-advantaged retirement accounts. In fact, it is never a good time to skimp. If you can’t max out your contributions, you should at least put in whatever you can. If your company offers a 401k match, max it out. Then put as much as you can in a Roth IRA. Finally, if you have money left after maxing out your IRA contributions, put more in your 401k, up to the limit.
- Being stingy with your money. Saving your money and growing your wealth is important — but so is generosity. In a way that cannot be satisfactorily explained, giving seems to pay you back. Whether you believe it is God, karma or just the idea that freely giving means freely receiving, it is generally accepted by personal finance experts that when you are generous in donations, you enjoy greater financial abundance. Don’t overlook this part of healthy personal finances.