8 bad money habits to break

8 bad money habits to break

In order to provide security and a decent standard of living for you and your family, you need to break bad money habits. They can prevent you from reaching your financial goals and set you up for failure. 

You need to work on replacing any of these bad money habits you may have with positive ones that will move you closer to your goals

1. Not having a budget

Budgeting is the best way to monitor and better understand your spending habits. Knowing where your money goes and where it comes from can help you keep track of your spending.

Calculate your income and expenses and set goals for yourself to help keep you on track and on target. Closely observe your spending habits to see where all your money is going.

2. Impulse shopping 

This poor spending decision can add up quickly and cause you to run out of money fast. The more you spend on non-essential items, the less money you have left for essential items. 

No matter how great they sound, avoid all discounts, sales, special offers, and rewards. Before you purchase anything, take a moment or 24 hours to think about how much you need or want this item. 

3. Paying your bills late 

Whenever you pay a bill late, you risk facing rate increases from the vendor. If you pay your bills early, you won’t have to worry about forgetting and incurring late fees.

Set up automatic payments for all your important bills so you never have to think about them again. You should also make it a goal to pay a bill as soon as you get it.

4. Using your emergency fund for non-emergencies

Emergencies are those life and death situations that can alter your life forever ​​if you’re unprepared. You can’t protect yourself and your finances if you keep dipping into your emergency fund. 

Once you start an emergency fund, make regular contributions to it and don’t touch it unless it’s an emergency.

5. Spending on credit

Credit cards are a great way to pay for emergency purchases when things are extra-tight ​​but they also make it far too easy to fall into the spending trap. 

Making and sticking to a thoughtfully-crafted, realistic and practical budget is a good way to rein in your credit card spending. You can also limit your credit card spending by using your ATM/debit card to shop.

6. Not saving even when you can afford to

Failing to prepare for unexpected events is one of the most common bad money habits to break. Paying yourself first by saving money before you spend any money is the best way to protect your finances and reach your goals.

By automating your savings, you can save more without even thinking about it. Don’t wait to “have more” before you start saving. No matter how tight your current budget is, you can always find ways to trim your expenses. 

7. Hoarding Money 

If you’ve been hoarding money to the point of misery, it’s time to break the habit. Holding on to money will not make you richer. Instead, it will throw your good money management off-track especially if you deny yourself certain indulgences.

Don’t be so money-conscious that you entirely deny yourself fun. Lighten up on yourself a bit and enjoy the money you’ve earned.

Final Thoughts

It’s another salary week! If you find yourself with no savings and spending more money than you earn, it’s time to drop those bad spending habits and start working towards better financial habits. Taking full accountability for where you are and how you got there will show you the way out. 

Saving and spending wisely will always pay off. Visit www.overwood.ng today to start saving towards making your dreams a reality

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