Like any other bad habit, bad money habits can cause a lot of frustration and harm. When it comes to bad money habits, the results can be very bad: For example, you might have to pay thousands more in interest, which would leave you with no money to pay for unexpected costs. Worse, bad money habits can hurt your credit and finances so much that you can't reach your goals, like buying a home or retiring. But don't worry too much; bad habits can be changed. The first step toward this goal is to figure out which of your habits might be holding you back. Then you'll try to change at least one bad habit into a good one. Once you've done that, you'll be well on your way to a financially stable future. Here are five bad money habits and what you can do to stop them.
1. Unwise spending
When you spend money on things that aren't necessary, you have less money for things that are, like paying your mortgage or rent, paying down your credit card debt, paying off your student loans, or saving for retirement. To improve your finances, you don't have to stop spending on things that aren't necessary. It's part of almost every healthy budget and happy way of life. But looking at it and cutting back where you can is a good first step. Here are some things you can do to stop spending money you don't need to: -
Pay with cash. According to research, buying with cash hurts your mind more than paying with a credit card. Because of this, people who pay with cash tend to spend less than those who use credit or debit cards. Also, if you leave your credit and debit cards at home and only shop with cash, you'll be less likely to buy things you don't need.
At home, cook: Cooking at home is a good way to cut down on food costs. You can go out to eat once in a while, but cooking at home can help you save money for things like rent and utilities, and it's usually healthier, too.
Stop and think before you buy: If you want to buy or sell, think about the following: Does this thing have to be there? Do you have enough money? Will this purchase keep you from putting money in your savings account or charging more things to your credit card? If the answers to these questions make you change your mind, you might want to postpone your decision.
Try not to buy on sale: Don't buy anything you don't really need. And if it's on sale, go ahead and get it.
Check your memberships and subscriptions: Even getting rid of some of your memberships and subscriptions could save you hundreds or even thousands of dollars per year.
2. Not putting money aside for emergencies
An emergency can cost you a lot of money, whether it's a broken leg, two flat tyres, or a sick cat. If you haven't saved much for an emergency fund, these costs could affect your budget for a long time to come. If you don't have an emergency fund, you might have to use a high-interest credit card to pay for a hospital bill or fall behind on your rent. Lastly, it may force you to choose which bills to pay and which to ignore, which is never a good situation. How to Break a Habit is easy: make an emergency fund and save money. Most of the time, you'll want to keep your emergency savings account separate from your other accounts so you can't use it to pay for everyday things. The amount of money you and your sibling or best friend should put into an emergency fund will probably be different. Most emergency funds have enough money for three to six months of living costs. Using that formula, if your monthly living expenses, like rent and car payments, add up to $2,500, your emergency fund should have a balance of $7,500 to $15,000. The hardest part of putting together an emergency fund is getting it started. Start with what you can afford and make sure you put money away regularly. That might mean putting away $25 a week at first for your emergency fund, and then increasing it to $75 or more a week when you can afford it.
13 окт 2024
