If you’re not careful, your bad habits could jeopardize your retirement plans. Life is complex, and sometimes things move fast. While it’s easy to get caught up in the present moment, failing to prepare for the future could leave you with a shortage of funds when you’re ready to retire. Before you know it, several bad habits have begun to form and suddenly, your finances are a mess.

But it doesn’t have to be this way. If you know about the bad financial habits people tend to form, it can be easier to avoid them.

Here are simple ways to overcome these obstacles and secure your financial future.

1. Overspending

Overspending is one of the most apparent bad financial habits people form, yet it can be one of the most difficult to overcome. Spending too much will make it difficult to set money aside for retirement and other financial goals.

The average American with a high school diploma has annual expenses of $35,036, according to the World Economic Forum. But their income is $40,147 on average, meaning they spend slightly less than they earn.

With so many enticing items available for purchase today, it’s no wonder overspending is a common occurrence. But if you must curb spending, try going out to eat less or canceling subscriptions.

2. Relying too heavily on debt

Relying heavily on debt is part and parcel of the overspending problem. When you spend too much, you are more likely to take out a loan or carry a balance on a credit card. But debt often comes with high interest rates, significantly dragging you down on your financial goals.

There are many situations in which debt can be problematic. However, an unmistakable sign of a problem is when you struggle to get out of debt despite your best efforts. If debt is a problem, try reducing your expenses and relying less on credit cards.

3. Depending on Social Security

Millions of people rely on Social Security and it is undoubtedly a vital resource, but Social Security doesn’t provide enough for most people to maintain their lifestyle. For example, the average Social Security benefit is $1,827 in 2023. While that is a generous benefit, that works out to $21,924 per year — hardly enough to support the average American lifestyle. Thus, it’s crucial to have other sources of retirement income, like a 401(k) or IRA.

4. Not saving enough

As we mentioned before, Social Security benefits alone may not be enough to support your lifestyle and yet, many people get into the bad habit of not saving enough. Not saving enough can be a significant problem in retirement. It can lead to stress, anxiety, and a lower quality of life in retirement. It could also force you to work longer. To help avoid this, try putting away 10 percent to 15 percent of your income annually. Do this by increasing contributions to your employer-sponsored retirement plan like a 401(k), especially if your employer matches contributions.

5. Failing to plan for retirement

If you fail to plan for retirement, chances are you won’t save enough and will struggle to pay your daily expenses. It’s essential to start saving money early and often. Putting money into your 401(k) or IRA early will allow you to take advantage of compounding interest.

Meeting with a financial advisor to help you create a custom retirement plan is also a good idea. Use Bankrate’s financial advisor matching tool and find a financial planner in your area in minutes.

6. Investing too conservatively

You’ve worked hard to build the life you want, including a job that pays well, but you don’t want to squander your hard earned money on a volatile stock market. This is precisely the line of thinking that leads people to invest too conservatively.

The concern is understandable, but investing too conservatively risks not having enough money in retirement because your investments may not grow enough. You should balance your risk and return by maintaining a diverse portfolio of assets like stocks, bonds, cash and real estate. This will help you earn the necessary returns without taking on undue risk.

7. Not taking advantage of employer contributions

Many employers provide matching contributions on retirement plans like 401(k) and 403(b), up to a certain percentage of your salary. These contributions are essentially “free money,” but only if you contribute first. If you want to retire and support yourself financially, it only makes sense to contribute at least enough to receive the full employer match.

Bottom line

Life moves fast, and sometimes it can be hard to keep up with everything. Your finances are no exception to this. But financial planning is a long-term game, and you must form good financial habits sooner. By avoiding the bad financial habits mentioned here, you can put yourself on the right path toward a healthy retirement.