Even your dad’s money mistakes count: Repeating can cost you big

This post has been shared by Amy Nickson.

Financial mistakes are very common things. There are many people who suffered a lot due to some fatal money mistakes they did in their life. Remember, mistakes are mistakes. No matter how old are you, how rich are you, even what position you’re holding in your professional life. During my childhood I wondered, “ I’m so lucky to have a super dad in my life.” How magically he can solve each and every problem. It may be financial or other issues. But, as I grew up and in my work as a financial writer, I can easily identify some vital financial mistakes which not only you, your partner, relative, even parent shouldn’t repeat it.

In this article, I’m going to describe some hazardous money mistakes that are quite popular and most parents especially fathers are oblivious of this. And for this, most of our parents are suffering with their distressed financial state.

Dad’s money mistake you should avoid politely

Mistakes are quite obvious. It can take you to any place. So, don’t think you’re right in your every financial decision and your father was ignorant with this matter. Overconfidence can dig a big hole in your financial future. Remember, your father is the first person who had given you the first pocket money to spend. He was the bread earner of your family. You should respect and learn his accuracy, knowledge and most importantly his experience. So, follow your father’s every valuable and wise decision instead of some mistakes which are quite common at their time.

1. Hiding cash under the mattress

If you have enough money and you have the habit of hiding it under your mattress, you’re actually wasting the money. Money must always be kept in a bank or a financial institution so that it can growwith time and you can use in the future. It is one of the biggest blunder which our past generation has followed but you must not repeat in your life.

2. Making late payments

You need to be careful that, late payments and penalty fees can take a toll on your financesin the future. Missing your payments is a guaranteed way to destroy credit report and hurt your score. It’s better to take steps to make timely payments than falling into massive debt traps.

3. Borrowing from a retirement fund

There are so many people who had committed this mistake and suffered severely in their post retired life. It’s a very easy and tempting option to borrow money from a retirement account to survive, when you’ve less money in your hand. But doing this, you’re actually ruining your post retired lifewhen you’ve no other source of money. Moreover, If you do this, not only will you remove your pre-tax money, but also you have to repay it with after-tax earnings. Though, borrowing from your 401(k) is the best way to get easy access to cash, but this is one of the biggest mistake that can destroy your financial future.

4. Not giving the money lessons to kids

In today’s economy money plays a very significant role in everyone’s life. As I have told in introductory lines, that no matter how much bank balance you have or how much property you’ve inherited. You should have sound knowledge about finance in order to tackle it properly in your life. Otherwise, you may fall into serious financial problems. It may come to you as credit card debts, unemployment, rejection of loan, rent, insurance, mortgage application, so on. So, don’t repeat your dad’s mistake. They thought a kid should stay away from money. Because, it may make them bad, can create a stress on them. All are wrong statements. Only a father can teach a child the basic financial lessons to make financially educated.

5. Closing existing lines of credit

Some vital financial lessons such as closing accounts all of a suddenor having many credit cards can affect vital impact on your financial life. So, if a father made such a vital mistake, then the kids may follow the same. You may come across stories of credit counselors or financial consultants telling you to close down your existing lines of credit to boost your credit score. But this is a myth as you must never close your credit card accounts that has balance in it. Pay down the entire balance and then send a letter to the company requesting them to close your account.

Final words

Every person has their own perception. So, no doubt your father is best in his own terms. But, It’s advisable that when you’re making some financial decisions, then you need to make the decision more carefully. Otherwise, your one single mistake can cost you badly. If you follow your father’s financial perceptions blindly you may face problems in the recent economy as well. As, both of you belong to a different economy. So, be very careful when you’re investing money or obtaining loans or insurance or simply closing some of your credit card accounts. Because, mistakes are small but the outcome can be devastating.