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FOMO, or the fear of missing out, is one of the most dangerous traits in personal finance. It can lead individuals to make decisions rooted in envy rather than sound logic. Observing friends or neighbors enjoying financial success can create unnecessary pressure to keep up, often resulting in poor financial choices. Instead, it's essential to focus on personal financial journeys rather than comparing oneself to others.
Financial Order of Operations
For anyone confused about where to put their money, the recommended approach is following the “Financial Order of Operations.” Here’s a summarized breakdown:
- Deductibles Covered: Ensure you have savings to cover your deductibles, ideally one month’s expenses.