These 3 Financial Moves Might Haunt You for Years

When it comes to financial matters, sometimes, the most we can do is do the best we can given our circumstances and knowledge. But unfortunately, financial literacy isn't something that's widely taught in the U.S., so you might end up falling victim to a financial blunder due to simply not knowing better.

The harsh reality is that certain financial mistakes are harder to recover from than others. But here are a few mistakes that might haunt you for years.

1. Racking up credit card debt

You may be inclined to charge an extra expense on your credit card here and there when you don't have the cash to cover it. But over time, those expenses could add up. And if they add up to a larger balance you're then forced to carry for years, it could do a number on your finances.

Let's say you wind up with a $5,000 credit card balance that takes you five years to repay. At 20% interest, you're looking at spending almost $2,950 on interest alone by virtue of carrying a balance all that time.

Plus, if you end up with a large credit card balance relative to your total spending limit, it could result in credit score damage -- even if you're making your minimum monthly payments on time. And that could make it costlier to get a loan when you need one. So your best bet is really to try to pay off your credit cards in full every month -- even if you occasionally have to pick up a side gig to drum up the money.

2. Delaying IRA contributions

You may not feel inclined to contribute money to an IRA when retirement is many years away. But if you delay those contributions, you might end up with a much smaller balance.

The stock market's average annual return over the past 50 years has been 10%, as measured by the S&P 500. If you put $3,000 into your IRA at age 22, it will grow to about $129,000 by age 67 if your IRA delivers an average annual 10% return, too. If you wait 10 years to make that $3,000 contribution, you'll be looking at closer to $84,000 instead, assuming that same return.

If you have the ability to contribute to an IRA sooner rather than later, don't wait. Even a modest contribution in your early 20s could grow into quite a substantial amount by your 60s.

3. Buying an expensive car

Some people drive their cars every day. So you may be inclined to pay up for a car because it's something you'll get a lot of use from.

But remember, buying a pricey car won't just mean having a larger auto loan payment. It might also mean paying a premium for everything from car insurance to maintenance. 

Meanwhile, your car is something you might keep for years. But what if your financial situation changes? What if you move or have kids, and your bills go up because of that? Suddenly, the higher expenses associated with owning your car might come back to bite you, even if your vehicle is already paid off. 

Before you choose to buy an expensive car, think about the long-term repercussions. And consider a less-expensive alternative that still does a good job of getting you around town.

Sometimes, a seemingly innocent decision on your part can end up having consequences that aren't so great. So be careful with credit card debt and pricey vehicles, and do your best to sneak some money into your retirement account as soon as you can.