• Thu. Dec 1st, 2022

Personal habits that can increase financial risk

ByCindy J. Daddario

Jan 21, 2022

(MENAFN ValueWalk)

When it comes to things that could jeopardize your finances, certain activities immediately come to mind. Investing heavily in risky stock options, leaving your job without a backup plan, or habitually making large, unnecessary purchases are all obvious actions that are sure to take a toll on your finances.

But what about things you do in your everyday life? Surprisingly, common personal habits can also put your personal wealth at risk. Some of these habits don’t seem to have anything to do with money, but they can have big repercussions in ways you haven’t considered.

Table of Contents show

  • 1. Recreational alcohol use

  • 2. Lack of savings

  • 3. Continuing with subscriptions you don’t use

    • 3.1. Concentrate on everyday life

Recreational Alcohol Use

When linking alcohol and financial risk, lawsuits or criminal charges for misconduct are the obvious route. A perhaps less well-known danger, however, are the late effects of a craniocerebral trauma. With alcohol being an estimated contributor to approximately 50% of all traumatic brain injury cases, the habit of drinking can have very real consequences.

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A brain injury can affect your finances well beyond significant medical bills. If you have a brain injury that causes permanent damage and leaves you unable to work, your income could be a fraction of what you’re used to. While disability payments can only provide meager support, these payments can take months to initiate and may have to go through multiple rounds of appeals.

Missing savings

Expenses on a monthly basis at the high end of your monthly income are not a problem until unexpected expenses arise. The problem with this is the fact that unexpected expenses will surely come at some point. Whether car repairs or water damage in the house due to a broken pipe, there are costs that cannot be postponed.

Americans have become more aware that they have set aside funds for emergencies. However, about 51% have less than three months of spending in savings. When unexpected costs arise, it’s all too easy to fall into the trap of high-interest borrowing. This can be in the form of credit cards or payday loans. If you don’t adjust your monthly expenses heavily, you risk spending a long time recovering from interest payments.

Resume subscriptions you don’t use

It can sometimes be comforting to have the ability to use something, even if you choose not to. Signing up for that gym membership earlier in the year might seem like a step in the right direction for overall health, but it serves no purpose other than draining your bank account when you’re not using it.

Maybe there was a single TV show you were looking forward to that you signed up to a streaming service. After watching, did you find anything else about this streaming service? Does it show up as a recurring monthly charge on your credit card without being used?

Many services start with a free introductory period that requires you to enter payment information at the beginning. This is a smart business strategy as it is easy to forget that payment is due in 30-60 days. Even if you do remember, you must take the time and effort to call or log into your account to cancel. If you don’t regularly check your credit cards and bank accounts for automatic payments, you could be wasting huge amounts of money every month.

Whether you’re capping subscriptions and other memberships within your annual household budget, or just checking that you’re using the memberships you pay for, make a habit of not throwing money away.

Concentrate on everyday life

Financial difficulties are not always the result of failed deals or lost investments. A large part of success in terms of financial stability comes from everyday habits. In order to avoid unforeseen difficulties with personal wealth, it is best to practice good habits and not take unnecessary risks.

Updated on January 21, 2022 at 11:40 am


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