Personal habits that can increase financial risk

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(MENAFN-ValueWalk)

When it comes to things that may pose a risk to your finances, there are certain activities that may immediately come to mind. Investing heavily in high-risk stock options, leaving your job without a backup plan, or making large and unnecessary purchases are usually obvious actions that can definitely take a toll on your finances.

But what about the things you do in your everyday life? Surprisingly, common personal habits can also put your personal wealth at risk. Some of these habits apparently have nothing to do with money, but they can make a big impact in ways you haven’t considered.

Table of Contents Show

  • 1. Recreational alcohol use

  • 2. Lack of Savings

  • 3. Ongoing subscriptions you don’t use

    • 3.1. Focus on the day to day

Recreational alcohol use

In linking alcohol and financial risk, the obvious path is lawsuits or criminal misconduct charges. However, one danger that may not be as well known is the long-term consequences of a traumatic brain injury. With alcohol estimated to be a contributing factor in approximately 50% of all traumatic brain injury incidents, the habit of drinking alcohol can have very real consequences.

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Brain injuries can affect your finances in ways that go far beyond substantial medical bills. If you have a brain injury that causes permanent damage and prevents you from working, your income could be a fraction of what you’re used to. While disability payments can provide meager assistance, these payments can take months to start and may need to go through multiple rounds of appeals.

lack of savings

Spending monthly on the higher end of your monthly income isn’t a problem until an unexpected expense comes along. The problem with that is the fact that unexpected expenses are bound to come at one point or another. Whether it’s a car repair or water damage to your home from a burst pipe, costs will come up that can’t be delayed.

Americans have become more aware of having funds set aside for emergencies. However, approximately 51% have less than three months of expenses in savings. When unexpected costs arise, it’s all too easy to fall into the trap of high-interest loans. This can come in the form of credit cards or payday loans. Unless you drastically adjust your monthly expenses, you risk spending long periods of time recovering from interest payments.

Ongoing subscriptions you don’t use

Sometimes it can be comforting to have the option to use something, even if you decide not to. Signing up for that gym membership earlier in the year seems like a step in the right direction for overall health, but it doesn’t do anything more than drain your bank account if you don’t use it.

Maybe there was just one TV show you were excited to watch and you subscribed to a streaming service. After you finished looking, did you find anything else on that streaming service? Is it showing up as a recurring monthly charge on your credit card without being used?

Many services start with an introductory free trial that requires you to enter payment information up front. This is a smart business strategy as it is very easy to forget that payment is due after 30-60 days. Even if you remember, you still need to 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 large amounts of money each month.

Whether you set a limit on subscriptions and other memberships within your annual family budget or just check that you’re using the ones you pay for, get in the habit of not wasting money.

Focus on the day to day

Financial difficulties do not always come from the consequences of failed business deals or investment falls. A large part of success in financial stability comes from day-to-day habits. To avoid unforeseen difficulties in personal assets, it is best to practice good habits and not take unnecessary risks.

Updated on January 21, 2022 at 11:40

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