Here at the AgingOptions blog we appreciate articles that provide a fresh twist on familiar information. Sometimes it’s that unique perspective that finally breaks through our common human tendency to procrastinate or become complacent about important advice we know we should be following. That was our reaction to this Kiplinger article by contributor Josh Monroe listing what he calls seven ways to sabotage your financial future. We first encountered this piece a year ago, and as we read, we saw ourselves in several of these potentially ruinous decisions. Let’s bring it back for another look, and see if you feel the same.

Self-Sabotage: Short-Term Focus Instead of Long-Term Results

“Why would anyone sabotage their own future?” Monroe asks. “It’s not typically a conscious decision, but the product of focusing on short-term gains instead of long-term results.”  Some of our bad short-term behaviors are relatively benign, he suggests, like hitting the snooze button instead of getting up to go to the gym, or squandering time on social media instead of finishing that important project.

But, says Monroe (who is a certified financial planner), there are many decisions we make, deliberately or otherwise, that are far more serious, with lifelong consequences. “We often make decisions that set ourselves up for long-term failure without even realizing that’s what we’re doing,” he writes. Some of these are bad choices we make intentionally, while others are “sins of omission” – things we should do, but fail to do.

Let’s review these seven acts of financial sabotage and see how many apply to us.

Self-Sabotage Danger#1: Missing Out on Opportunities (to Save)

“Do you have FOMO?” Monroe asks – the Fear of Missing Out?  Often, FOMO manifests itself as spending unwisely to avoid “missing out” on some new, expensive item or experience you feel you have to have. But there’s a different kind of opportunity people with FOMO overlook: the opportunity to start saving early.

“A few impulse purchases over time may not lead you to financial ruin, but missing out on savings opportunities certainly can,” says the article. “You can’t get time back, and missed opportunities to save now means one of two things: You either need to add time on the back end — which means delaying retirement – or you need to take on more risk on your investments.” The lesson is to stop “following your FOMO on impulse purchases” so you can focus on saving for the future, thus boosting the odds of achieving financial independence.

Self-Sabotage Danger #2: Making Big Purchases with Irrevocable Consequences

This common mistake involves tying up big sums of money in assets you can’t quickly sell. But are the consequences really irrevocable? “OK, irrevocable is a bit strong,” says Monroe, “but I use that word to make my point. If you splurge and buy an outrageously expensive pair of shoes late one night from your smartphone, it may not be a wise decision, but it likely won’t lead you to financial catastrophe.”

Nevertheless, there are some decisions that, over time, can lead to financial ruin. The top culprits are “big decisions that are hard to undo, such as the purchase of a house, car or boat.” If you’re considering any major purchase, you need to take resale value into account, and you need to consider what would happen if you had to sell it. “The more unique an asset is, the fewer buyers it brings,” says the article. “This decision could leave you stuck with a unique, but illiquid asset. Tying up a significant percentage of your net worth in illiquid assets can be a great way to sabotage yourself.”

Self-Sabotage Danger #3: Falling Prey to Lifestyle Creep

This is a common danger, in our experience. “Getting a pay raise is always exciting,” says Monroe, “but what you do with that increased income can separate the wealthy from the perpetually poor. As income goes up, there is a natural desire for some people to increase spending and upgrade their lifestyle.

Many would assume the solution to all financial problems is to earn more money. However, when more income is matched with higher expenses, such as second homes, luxury cars or multiple country club memberships, this margin may never appear.”

One solution the Kiplinger article recommends is automatic savings: it’s easier to ignore money you don’t see. But the important suggestion is to be aware. “By constantly upgrading your lifestyle to keep up with or even outpace income growth, you may find that no matter how much income you earn you always feel squeezed.”

Self-Sabotage Danger #4: Setting the Wrong Priorities

“Did you know it’s possible to be a great saver and still sabotage yourself financially?” Monroe asks. “It’s simple: You save for all the wrong things.” Some of these things might be noble, such as saving for your kids’ college education, but unless you’re considering your own future needs you could be setting yourself up for financial disaster down the road.

“Make sure you’re on track for retirement and financial independence before diverting too much money toward a child’s education or a second home,” the article emphasizes. “All goals are not created equal and, unfortunately, sometimes even noble goals need to take a backseat. Only you will be saving for your retirement.”  Don’t sabotage your future by paying for your kids’ education only later to be “forced to move in with them when you’re 75 because you didn’t save enough money to retire with dignity.” That’s sound advice, we think.

Self-Sabotage Danger #5: Neglecting the Defense

“A well-rounded financial plan blends offensive strategies, like investing in stocks, with defensive strategies, such as building an emergency fund and buying adequate insurance coverage,” Monroe writes. However, because building cash reserves and covering all insurance needs doesn’t sound exciting, many people “put all their chips on offensive strategies.” This, says the article, is a dangerous delusion.

“This strategy could work out great if life never throws you a curveball,” says Kiplinger. But crises are virtually inevitable. “Being underinsured and ill-prepared to fund an emergency could set you back years on your investing plan, undoing any potential advantage to skipping the defense. Playing offense only with your finances is a lot more like a Las Vegas strategy than a financial plan.”

Self-Sabotage Danger #6: Making Temporary Losses Permanent

This act of self-sabotage is a particular problem in a volatile stock market, and involves investors who become fearful during a downturn and turn “paper losses” into permanent ones by selling prematurely. “You own shares of stocks, bonds, and mutual funds,” Monroe writes. “The value fluctuates daily but you can certainly panic and make a temporary loss become permanent by reacting to low values and selling to avoid further losses.”

He cites someone he knows who watched their account daily during the Great Recession in 2008. “When their balance plummeted by 50 percent, they sold all of their investments in stocks and only held cash to avoid losing any more. Worse yet, when the market turned around, they stayed in cash, afraid to invest again for fear of losing more. Instead of avoiding more losses, he simply galvanized that one as a permanent loss of capital.” This fearful person also missed out on an entire decade of strong recovery since 2010.

“Do this a few times in your investing life,” Monroe warns, “and you can be certain to sabotage yourself no matter how much you have saved.”

Self-Sabotage Danger #7: Doing it Alone

“You’re familiar with the term ‘blind spots’ when it comes to driving,” says the article. “Unfortunately, they exist in our everyday life too, especially our finances. The big problem is that often, I can’t see my own blind spots and you can’t see yours, either.”

That, he says, is why professional help is so valuable. “Many people go it alone when it comes to financial planning. But, often, they don’t know what they don’t know. As a result, they can’t fix what they don’t see.”  We generally agree that a qualified, objective financial adviser can serve as a guide. Not only can he or she help you avoid sabotaging your financial future, but the best advisor can also help you prepare a financial dashboard, a flexible tool to guide all your financial decisions. Contact AgingOptions and we’ll gladly refer you to a trusted planner who can assist you.

My Life, My Plan, My Way: Get Started on the Path to Retirement Success

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(originally reported at www.kiplinger.com)