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Developing good money habits can help you reach your financial goals, but unnecessary spending can slow down your progress. A financial plan is essential, but it can be challenging to stick to it. Here are six common money mistakes that can be turned into good habits as you work toward your financial goals.

#1: Excessive discretionary spending

Although it’s fun to indulge in a few lavish meals and trips on occasion, lifestyle creep can easily occur as the frequency of these purchases increases. One of the best ways to avoid this is to limit your discretionary spending to 30% of your income and keep essential expenditures at 50%. You can also monitor your spending habits to keep track of where your money is going.

#2: Insufficient emergency fund

A small deposit into a savings account can seem like a good cushion, especially if you have a job loss or car repair on the horizon. However, having insufficient funds can negatively affect other financial goals, such as building a retirement savings account. One of the most important factors you should consider when setting aside money for emergencies is having at least three to six months of your household income. You should also keep in mind that some savings accounts have higher interest rates.

#3: Overpaying for housing

If you’re planning on buying or leasing a home or apartment, it might be tempting to go over your budget even though you can afford to pay more. Paying too much for mortgage or rent can cause you to feel financially pressured or put off other financial goals. One of the most common guidelines people follow when it comes to budgeting is limiting their housing expenses to around 30% of their gross income. This can help them avoid getting carried away by the cost of living. Before you start looking for a home, you should consider the impact of your rent or mortgage payment on your other financial goals.

#4: Putting college ahead of retirement

Although it’s natural for parents to help their children with college expenses, it’s important not to sacrifice other financial goals. Since children can often get financial aid, loans, and grants, your options for funding retirement are limited. First, fund your retirement by contributing to your retirement accounts, such as IRAs, Roth, and even HSAs. You can also explore investing in a state-based college savings plan, which can provide tax benefits. If you have enough savings or income beyond what’s required for your current financial goals, you should consider covering some or all of your child’s college expenses. However, make sure that this doesn’t affect your retirement planning.

#5: Paying too much attention to market fluctuations

Although changing your investment strategy depending on your goals and age is important, doing so can hurt your returns. For instance, investors who try to time the market by reacting to short-term changes often do poorly. Instead, focus on the market and not on past performance. A diversified portfolio can provide long-term gains, even if past results aren’t guaranteed. If you’re planning on investing in a long-term strategy, it’s crucial to establish a relationship with a financial professional.

#6: Raid retirement savings

If you have a company-sponsored retirement account, you can borrow money from it to cover expenses like your child’s college or emergency expenses. Since you have a set number of years to pay off your loans, you’ll still be contributing to your retirement accounts and making loan payments. If you leave your company, the money must be paid immediately. Doing so could result in penalties and taxes. Avoid this temptation if you’re planning on investing in a long-term strategy. It can take a long time to build a retirement fund, and achieving the same level may not be possible later.

Getting caught off-guard by these money mistakes can quickly affect your financial goals. However, you can avoid these issues and reach your long-term objectives by learning how to manage your money better.