5 Financial Habits to Break April 9, 2021 Family Financials Print In sports, even the flashiest of moves or the cleverest strategies won’t help you win if you haven’t taken the time to master the fundamentals. Likewise, even savvy investors fall victim to certain pitfalls when it comes to managing their finances. Addressing these bad habits can help you build a stronger financial foundation: Not budgeting. Many people have a clear picture of major monthly expenses, like their mortgage and car payments, but are surprised to find how big a bite all the “little things” take out of their wallet. For example, spending $15 on lunch at work every day will cost you about $3,900 a year. Creating a budget helps you develop a clear picture of your cash flow and prevent overspending. (Click here to read more on budgeting and download a copy of our Budget Worksheet to help you get started.) Not saving for emergencies. Fender benders, basement floods, the odd root canal—such unpleasantries happen to us all eventually, but many of us aren’t financially prepared for them. We recommend keeping three to six months of living expenses in savings to help cushion the blow of a lost job or major medical emergency. Not paying off your credit cards. If you don’t have a clear picture of your cash flow, it can be all too tempting to simply carry over your credit card balance to the next month rather than riskThe probability that an investment will decline in value in the short term, along with the magnitude of that decline. Stocks are often considered riskier than bonds because they have a higher probability of losing money, and they tend to lose more than bonds when they do decline. an empty checking account. Keeping credit card balances with high interest rates can cost thousands in fees over time. Spending according to your budget, lowering your balances over time (once you have an emergency fund) and working toward paying your cards in full each month will boost your credit score, allow you to take advantage of credit card incentives and ultimately save you money. Not having a financial plan. A budget on its own isn’t enough to help you achieve your financial objectives. A financial plan serves as a roadmap, helping you pinpoint your goals, get the most from your assets and identify gaps and weaknesses. You can’t put a price on knowing where you want to get in life and having a clear path to get there—a good financial plan can help bring you that peace of mind. Not talking about your finances. Finances can be a difficult topic to broach with loved ones; making sure you and your partner are on the same page about types of debt, spending habits, current assets and financial goals is important. We can help you get the conversation started if you feel stuck or would like some guidance. If you’d like to talk more about your financial plan or need help breaking any of these habits, give your wealth management team a call. We’re happy to help. About Adviser Investments Adviser Investments is a full-service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trusts, institutions and foundations since 1994, and have more than 3,500 clients across the country and over $7 billion in assets under management. Our portfolios encompass actively managed funds, ETFsA type of security which allows investors to indirectly invest in an underlying basket of financial instruments (these may include stocks, bonds, commodities or other types of instruments). Shares in an ETF are publicly traded on an exchange, and the price of an ETF’s shares will fluctuate throughout the trading day (traditional mutual funds trade only once a day). For example, one popular ETF tracks the companies in the S&P 500, so buying a share of the ETF gets an investor exposure to all 500 companies in the index., socially responsible investments and tactical asset allocation strategies, and we’re experts on Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. Our minimum account size is $350,000. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868. This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. Companies mentioned in this article are not necessarily held in client portfolios and our references to them should not be viewed as a recommendation to buy, sell or hold any of them. © 2021 Adviser Investments, LLC. All Rights Reserved.