Everyone has bad habits. Maybe you bite your fingernails when you get nervous. Maybe you swear a bit too often. Or perhaps your bad habits are finance-related. If so, you’re not alone. Unfortunately, like other negative behaviors, money-centric bad habits can be tough to break. Fortunately, we’re here to help. Here are some common troublesome money habits and some ways to get them under control.
Overspending on Credit Cards
The average credit card interest rate is roughly 15 percent. That means if you’re someone who consistently revolves — or carries a balance — on your cards, you’re paying an extra 15 percent on every price tag you’re charging. Carry the debts for years and you’re paying even more. One reason this happens is that people don’t track their purchases as they make them; they don’t keep a running tab of what they can afford cutting themselves off from spending when they hit the limit. Instead, they guess and they often guess wrong.
If this sounds familiar, try leaving your cards at home when you go shopping. Or, if you prefer to swipe rather than reaching for cash, use debit. Then put a plan in place to deal with the existing balance you’re carrying. Guesswork belongs nowhere near credit cards.
Failing to Keep a Budget
The easiest way to keep your finances in check is to use a budget. Yet many people do not use them at all or fail to keep up with them. As Marketwatch reports, if you don’t use a budget, you have no real idea what money is coming in, what money is going out and most importantly, where it’s going.
Kick this bad habit by creating and keeping up to date with a budget. You can go old school with pencil and paper or use an app. Either way, you might be surprised how using a budget will set your finances back in order, and surprise! One of life’s biggest stressors — money — fades into the distance.
Another common bad habit is succumbing to impulse purchases. It’s just so easy to pick up another thing here or there as we’re out shopping. Even when we’re browsing online, there’s an ad here and an ad there, and buying things is usually a click away. It’s just way too easy.
The key to breaking this habit? Take the “easy” out of the equation. Shop with a list. You might want to even try shopping with only enough cash for what you have on that list. You can also try disconnecting all your cards from your laptop, so any time you want to buy something, you’re forced to make a real effort to do so. Those extra moments will allow you some time to consider if you really need the item, or merely want it.