Even if you have the best plans, you can still get into trouble with your money. Especially if you’ve developed some of these dangerous money habits.
If you have been contending with your finances, take a look at this list so as to be sure you’re not sabotaging your efforts with these bad habits
NOT HAVING BUDGET
You will never stay afloat financially if you don’t have a budget in place and know how to stick to it. A budget will allow you to see how much money you are making and where it is all going. It enables you to implement changes that help you save more money and avoid going broke each month.
Budgeting is not supposed to be a big task. Sign up with a program like Mint that automatically tracks your spending for you. All you have to do is pop into your dashboard each day to make sure you’re staying on track and make adjustments as needed.
Impulse purchases deals with emotion. You see a particular product you don’t want to miss or an item you have been longing to have, immediately and you jump to buy it before thinking whether you really need it.
To control impulse spending, force yourself to wait for a certain period (it could be a day or 30) before deciding on a purchase. It will give you enough time to think about your decision, and chances are you will realize you don’t need it after all.
SPENDING MORE THAN YOU EARN
Spending more than you earn is probably the worst financial habit people have. It will mean you either touch your savings or go into debt. If you have problem with spendy, you have to look at ways to try to earn more money or cut down your spending.
You can earn more money by finding a side hustle, which will occupy your time and you will have less time to spend money. Alternatively, the best option is to reduce your spending.
NOT PREPARED FOR AN EMERGENCY
If there’s one thing that is inevitable, it’s that at some point or another something will go wrong. An accident will occur, a job will be lost, an appointment will be terminated or an appliance will damage. It is very important to be prepared for an emergency when it comes to your finances. You don’t want to be caught off guard, financially anyway. Save some money for emergencies.
HOARDING MONEY AND NEVER HAVING FUN
On the opposite end of going into debt and spending too much is being afraid to spend anything! If you’ve been hoarding money to the point of great unhappiness it’s time to stop that habit. Lighten up on yourself a bit and enjoy the money you haveve worked very hard for.
BUYING UNNECESSARY THINGS
Do you have a hobby? Do you like to buy things? Have you accumulated many items that you rarely or don’t even use? If the answer to the above questions is yes, then you should consider stopping buying things that you don’t really need. If you have accumulated a collection of items like trading cards, books, etc, try and sell some of them and make some extra cash on the side while you are at it.
Make bargain-hunting a habit. Some of the wealthiest people in my study shopped at Goodwill stores. They look for the best deals, clipping coupons, watching movies during the early discount showings and shopping around for the lowest price. Put the cost difference after you have bargained into your savings account.
RELYING ON CREDIT TO PAY THE BILLS
Credit is very expensive and if not utilized properly, it becomes a trap! If you’re covering basic things like food or rent on credit or using it for meaningless purchases (like a vacation or new clothes) you need to redress the situation.
While at some point you might need to rely on debt – say, for education expenses, a mortgage, or an investment property it should be done with planning and extreme care. Do not cover your bills with credit cards or any other form of debt.