I am certainly no stranger to bad money habits, and I’m sure you’re not either.
However, these bad money habits can wind up costing you even more than you think. In fact, if you don’t take action towards changing for the better, you could wind up really broke.
Here are some of the most common bad money habits that you might be making.
One of the easiest ways to waste money is to avoid making a budget. Too many people skip this very important step.
Budgets aren’t just for those who are horrible with money or people living on limited income. Nearly everyone can benefit from laying out a plan, even if it’s just comparing income and expenses every month.
A budget will help you reach savings goals, pay off debt, or even make more money. It will help you stay mindful of your income and expenses, and you’ll know exactly where your money is going at all times.
While you’re making your budget, don’t forget about your current debt. Have you checked your credit score lately? How much money do you owe to credit card companies?
Ignoring your debt can make you feel better in the short term, but it won’t make it any less real. And in the long run, it’ll wind up costing you more, thanks to high-interest charges, a bad credit score, or even possible paycheck garnishments.
Pay attention to the debt you’ve got. Add up your total debt so you know what you’re facing, and then create a plan to eliminate it.
I’m definitely guilty of retail therapy. Essentially, it’s emotional spending, and it’s a huge part of our consumer culture. You know what I’m talking about: you’ve had a horrible day at work, got in a fight with your partner, or things just aren’t going your way, so you spend some money to feel better.
However, it never solves anything. It’s also a terrible money habit that can make you really broke. Instead, look at other ways to deal with stress, depression, or any other reason why you may be emotionally spending. Otherwise, you’ll just keep falling back into the same cycle.
I’d love to have the newest iPhone, the latest upgrades in my kitchen, or a brand new sports car. But those things aren’t always in our budget, and they definitely aren’t necessary to live well. They probably won’t really make you as happy as you think, either.
In fact, by spending money you don’t really have to acquire items you don’t really need, you might wind up unhappy.
By living beyond your means, aka spending money you don’t have, you’re going to wind up with a significant amount of debt. If you rack up enough of it, it might seem nearly impossible to get rid of.
Instead, think about your goals and what you really want and need in your life. Sit down with your budget, and figure out just how much money you really do have to spend. You’ll wind up much happier by living within your own means.