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4 ways your finances suffer when you ignore them

4 ways your finances suffer when you ignore them
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Kali Hawlk |
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It’s tough to face challenges, problems, or issues in our financial lives. No one enjoys dealing with money matters that leave us confused, hopeless, or negative about our ability to succeed.

Even focusing on the good stuff can be overwhelming. Some of our biggest financial goals will take years, if not decades, to achieve. Trying to track our progress when we want to fund a savings account can feel defeating rather than empowering if we look at how far we have to go rather than how far we’ve already come. Keeping your eyes on the prize for that long takes serious dedication and determination.

Many times, it’s easier to sweep problems under the rug and ignore them. It’s more fun to think about living for today rather than saving for tomorrow. It’s less stressful to make the minimum payment on debts without looking at the total balance than to face that debt head on and make an action plan to eliminate it once and for all. It’s simpler to let your spouse deal with the complicated statements and accounts rather than learn good money management habits on your own.

But no one will care about your money as much as you do — and no one will solve your money problems or achieve your financial goals for you. Ignorance is far from bliss when it comes to your finances, no matter how hard it might be to face the numbers (negative or positive).

Consider these 4 ways your finances suffer when you ignore them instead of taking action to manage them

1. You Risk Falling into Debt

If you ignore your finances, that means you don’t have a budget and you don’t track your spending. It doesn’t matter how earnestly you believe you’re living within your means. Without establishing a system to keep up with cash coming in and cash going out, you have no idea where you really stand with your money.

Sure, you may know you pay $1,000 in rent and $200 on utilities because these are bills you pay every month. But you can’t keep up with all the other little transactions you do every day throughout the month. You may not realize that you’re spending $500 per month on dining out, $300 on entertainment, $200 on new clothes, $400 on groceries and household goods, $500 on your car payment and insurance plus another $200 on gas, $100 for that smartphone… before you know it, your expenses total up to $3,400 and yet you only bring home $3,000.

Keep that up for a few months and you’ll be well in the hole. Unexpected expenses, like a tax bill or trip to the doctor, will set you back even further. The longer you ignore your finances, the longer it will take to to stop overspending — and the farther into the red you’ll be. And not only have you spent considerably more than you earn, but you also have no room for short-term or long-term savings.

2. You Can’t Save Money

If you go through life not paying any attention to your bank account, chances are you haven’t made saving a priority and don’t plan to anytime soon. How can you reach your savings goals if you don’t even know what those goals are, or how much you need to save in order to accomplish them? Ignoring your finances doesn’t just mean you risk accumulating debt — it means risking opportunities to boost your nest egg, too.

Remember, you can’t manage what you don’t measure. That means you need to know what you earn each month, what you spend, and what you have available to put towards a short-term savings fund, and emergency fund for unexpected expenses, and your retirement accounts for future financial security.

3. Your Credit Score Is Affected

If you completely ignore your finances, you risk being late on payments, not having enough money to cover payments, maxing out your credit cards, and overdrafting your account. Your credit score will consequently suffer.

And yes, your credit score does matter. It’s like your financial report card — and even if you’re not paying attention to it, financial institutions are. Even some employers and potential dates may be interested in your credit score. It’s important to pay attention and avoid bad money management behaviors that will cause your score to drop.

To keep a healthy credit score, you need to:

  • Make payments on time and in full
  • Maintain a low credit utilization rate (in other words, only use 30% or less of your available credit per month)
  • Only apply for a new credit card if you need it, and don’t apply for multiple cards at once
  • Keep your oldest line of credit open, even if you no longer use it

Check out this article for more information on how to improve your credit score if it could use a boost.

4. Big Purchases Cost You Even More

Your finances suffer in more ways than one from a bad credit score. You’ll also have more difficulty obtaining a loan with a poor score. And if you do manage to secure a loan for something like a car or home, it will cost you more than it would cost someone with a great credit score who pays attention to what their finances are doing.

That’s because you won’t have access to the lowest interest rate available. The interest rate is the fee the lender charges for letting you borrow money, and a higher interest rate means a higher monthly payment and a more expensive loan over time.

This makes things less affordable and less attainable. Again, your finances suffer because it’s harder to reach goals and achieve what’s important to you.


Money is a tool that we can all use. And like any other tool, you can put it to good use or you can weld it improperly and face disastrous results. Instead of ignoring your finances, take action.

Get organized, start tracking your money to understand where it’s going, and align your spending with your values. Start working to eliminate any debt you have and devote some energy to earning additional income so you can save and invest more. To stay motivated and inspired, set goals you want to achieve. Then develop an action plan to meet those financial goals.

Yes, it can be stressful, overwhelming, and confusing to start paying attention to your finances if you’ve previously ignored your money. If you’re confused or need help, don’t hesitate to ask an expert, like those at the National Foundation for Credit Counseling.

Seek to educate yourself and do research on topics you don’t know much about. You can accomplish amazing things if you’re willing to take the initiative and try.

About the author: Kali Hawlk is the founder of Common Sense Millennial, a resource for members of Gen Y who want to do more with their money. She works as a writer and content manager, and is passionate about personal finance and business. You can connect with her on Twitter @KaliHawlk.