5 Bad Money Habits You Need to Quit ASAP
Unless you are printing it in your basement, you probably have a limited amount of money to spend each month. Even when you have the best of intentions, you can still find yourself getting into financial trouble if you have bad spending or money management habits. These bad habits can cause unnecessary stress in your life.
The Bad Money Habit of Impulse Purchasing
An impulse purchase is an unplanned purchase of some product or service. Impulse purchases are all about emotion. Marketers and retailers know this and that is why you will see those small items, candy, and magazines at the checkout aisle. These marketers know that as you wait, you will shop, and buy.
Impulse shoppers see a sale and don’t want to miss out. They may see an item that they want to have immediately. You jump to buy it before you think rationally about whether you need it or can afford it.
To curb impulse spending, first, recognize when you do the action. If you reach for that magazine or candy at the checkout or the clearance item, force yourself to wait. Before pulling the trigger on a purchase consider if you have the extra money to spend on that item and if you really need the product. It will give you time to think about your decision, and chances are you’ll realize you don’t need it after all.
You'll never stay afloat financially—never mind getting ahead—if you don’t have a budget in place and know how to stick to it.
A budget allows you to see how much money you’re bringing in and where it’s all going. It enables you to make changes that help you save more money and avoid going into the red each month.
Budgeting doesn’t have to be a big chore. It can start with only carrying a small amount of cash with you each day. Use a system like envelope budgeting to systematically put money aside for paying bills.
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.
Relying on Credit Cards
Unless you’re able to pay off the balance in full each month, using credit cards is one of the worst things you can do for your finances. Especially if you’re using them to live above your means.
If you don't pay the card in full each month, every dollar you put on a card will cost you many times more in interest charges. You could spend years of your life and thousands of dollars paying down purchases you don’t even remember making. No purchase is so important it’s worth that.
Love of Convenience
Every once in a while, a convenience purchase can be a nice treat, or a necessary exception if you’re in a great hurry. Convenience purchases are those that are routine and take little thought when being bought. But if you find yourself regularly making convenience purchases, the convenience will cost you.
Stop getting fast food every day and learn to make a few basic meals in bulk that you can enjoy throughout the week. Make preparing a dish that can be separated into freezer containers for future lunches a regular weekend event. This preparation will even help on those evenings when you don't want to cook and pick up the phone to call for delivery meals.
Stop buying a pricey latte on the way into work every morning and get up 5 minutes earlier to brew a cup at home. A little extra work on your part could wind up saving you big time.
Yes, this includes traditional “vices” like drinking, smoking, and gambling. But it also includes less-obvious vices like eating out way too much or being a shopaholic. Anything that tempts you to spend large amounts of money you know you shouldn’t be spending.
Quit these bad habits and your life, not just your wallet, will be happier for it.