Our habits give us comforts of some sorts—that’s why we keep doing them, right? But bad habits, no matter how small they are, add up eventually and become a serious problem. They can affect your finances, too. If you catch yourself early on, you can change those bad money habits and avoid serious troubles.
Even if you’re already in the middle of financial strife, it’s never too late to break your bad habits and get back on track.
Here are bad money habits that you should break right now if you want to brighten your financial future.
Impulse Buying and Spending Too Much
Oh, there’s a new branded bag, a new gadget just got launched, you saw a beautiful dress at the mall—but the habit of impulse buying can really hurt your finances. Because it is unplanned, you most likely don’t have a budget for these extra purchases, which will ruin your financial plan (if you have one in the first place).
Buy only what you need. And if you are itching to buy something, let it sit for a night and see you if you still want it the next day. Consider whether you need it or you can afford it.
Next is spending too much. Do you find you never have enough money left week to week? Maybe you’re spending more than you earn. If you keep overspending, it can do terrible damage to your financial future. You need to spend less than you earn and prioritize saving for your future.
Using Store Credit or Credit Cards
Using a credit card requires serious self-discipline. If you treat a credit card as a money tree and you pay only the minimum, your debt load and interest will pile up. It won’t be long, and you will find yourself in a mountain of credit card debt. Use your credit card for important purchases only and get back to zero every month. If the availability of instant credit is a recurring problem for you, cut them up and only buy with cash.
Also, make sure you pay your bills on time. It is your responsibility. If you keep ignoring your deadlines, it can affect your credit record, making it hard for you to secure a loan in the future. If you keep making late payments, you may be charged overdue fees and crippling penalty interest, which can accumulate and definitely impact your financial future.
Not Budgeting or Saving
Without a budget plan, you will spend your money freely, and most likely on things that are not really that necessary. When you need to pay for something important, you might find yourself out of money. Budgeting helps you plan where your money needs to go, how much you can save, and if you need to make adjustments. That way, you avoid getting into the red and wondering where you spent all your money.
Budgeting doesn’t have to be a lot of work. There are all sorts of apps you can download and keep on your phone to track your income and expenses. They will help you get in control of your money and spending.
As for saving when doing your budget plan, even if it is just a small amount, saving a little is better than not saving at all. Saving a little every week is a perfect example of forming a good habit. Waiting until you have a big amount to save won’t work – when it comes, you will spend it, because you have not developed a saving habit. If you keep on spending all your earnings, it’s going to be a problem when a rainy day comes.
Personal Bad Habits That Cost Money
Drinking, smoking, drugs, and gambling are the top habits that can seriously affect your finances. These habits make you spend a large amount of money on things that you know you shouldn’t be spending on. Advice on how to stop is beyond the scope of this article, but if this is affecting your finances, do what it takes to reduce or eliminate them.
Buying Quick Fixes
There are times that you don’t mind paying extra because of the convenience and the time you can save. But if you regularly make convenience purchases, the costs can be significant. Instead of eating out on fast-foods, learn some healthy and quick recipes you can easily do at home to prepare your own meals.
Stop purchasing that expensive cup of coffee just because it’s famous when you can brew your own coffee at home for a few cents. Exerting a little more effort on your end, like waking up a bit earlier, can save you both money and time.
If you recognize having one or two (or more) of these habits, know that it’s going to sabotage your finances in the long run if you don’t start to change them. Think about the financial peace of mind you can achieve in the future as something that weighs more than the short-term buzz these behaviors are offering you right now.