The choices that we make every day can impact our financial goals big time. I mean, it’s just too easy to fall into bad habits that can derail our finances.
I had my fair share of these bad habits; I had always been an impulse buyer. If I really wanted something, there was no thinking twice. I loved eating out – all the time and I never really cared how those habits affected me. I just thought that they were small and insignificant.
But after having to quit my job and after taking a good look at where I was standing financially, that’s when it hit me. I’ve realized that those small and insignificant habits have financially sabotaged me. I knew that if I ever wanted to reach financial independence, those habits have got to go.
The key to mastering and gaining financial control is to start breaking those bad habits and start developing smart habits. That’s why today, I have decided to gather 7 Bad Money Habits to break in order for you to build more wealth. Check them out!
Sticking with minimum payments
I know that making minimum payments on credit cards are more doable than constantly paying the full balance. I’m definitely guilty of this. I was not comfortable spending half of my paycheck paying off the full balance.
Paying the minimum balance seems to be the best way to go especially if your budget is tight but constantly doing this will only cost you so much more money in the long run.
Try setting up an automatic transfer of the full balance from your checking account to your credit card – this will help avoid the temptations of going for the minimum payments.
Not Making savings as a Priority
I have always been guilty of this. I have always had the mindset of only saving what’s left and I was totally wrong. Nothing will ever happen if you continue to only save what’s left over, you have to learn to pay yourself first.
Make savings as a priority. If you have a list of all your expenses for each month, make savings a part of that list. You don’t need to save half of your paycheck, start with something small. The important thing is to stick with the amount that you’re comfortable with, that way it won’t feel too much of a burden to you.
You don’t track your spending
Tracking your spending is always one of the most important steps to take to help you achieve whatever financial goals you have. You need to know where your money is going and how much money you might be wasting every month. This was seriously a life-saver for me. Tracking our spending helped me realized that we were wasting so much money on things that are not even a necessity.
Doing this will show you where your money is going every month and it will allow you to cut back on things you are spending on that are not a priority.
Relying on Credit Cards all the time
Using your credit card is not a bad thing. It’s convenient and as long as you’re paying off the full balance every month – then you’re good.
However, if you’re just mindlessly swiping it for things that you can’t afford to pay off on the next billing cycle, then you’d probably be better off leaving your credit card at home and start using cash or debit.
Some credit cards have insane interest rates and if you’re not able to pay off the full balance every month, the interest rates pile up and it will end up costing you even more money. So, put that credit card away and go for cash or debit.
You will never achieve financial independence if you refuse to make investments. Investments are a crucial part in building your wealth.
A coworker once told me, that you can never be rich by just working, you need to make investments – it’s basically how the rich get richer.
Living beyond your means
We are almost always guilty of this. Like for instance, we use our credit cards to pay for things that we can’t even afford to pay in cash and then interest piles up and trap us in debt.
If you are guilty of doing this, then this should be the habit that you need to address first. Living beyond our means is one of the greatest mistakes that we can make in personal finance. We can either learn how to cut our spending by better budgeting or you can also find other ways to make extra cash to fill the gap.
We are always so guilty of telling ourselves that we will start saving money but always end up finding the perfect excuse not to. It’s time to stop justifying our actions of mindlessly spending and start being responsible for our finances.
We need to stop letting all those excuses hold us back. You have the ability to change your current situation. If you’re sick of being broke and always being in debt, change it.
I know this may be easier said than done but always remember that you always have the choice to work hard, create the life that you want and achieve the financial goals that you have.
Remember, all the sacrifices that you do now will reward you tenfold in the future. So, start by breaking these bad habits and replace them with smart habits. Doing this will definitely make you one step closer in achieving your financial goals.
What about you? Do you have any bad money habits? Let me know in the comment section below or send me an email, I would love to hear from you!