Bad Money Habits You Need to Break Now
Are you sick of living paycheck to paycheck?
Do you feel like you can never gain control over your money?
Is your money telling you what you can and cannot do instead of the other way around?
If you answered yes to any one of these questions, you may be falling prey to some bad money habits. If you are trying to reach financial independence, it will be crucial that you drop these bad money habits and start forming good habits instead.
Maybe you don’t have every one of these bad money habits, but having even one can harm you financially. Look them over and find out what bad habits you can tackle now to change the trajectory of your financial future.
Becoming Aware of Your Bad Money Habits
Before you can begin to fix your money habits, you need to be aware of which ones are keeping you living paycheck to paycheck.
Sometimes, it just takes one person pointing out a bad habit in order to make the correction. So here are some bad money habits that you may have incorporated into your finances and how you can correct them now!
Bad Money Habits You Need to Break Now
1) Not Tracking Your Spending
Tracking your spending is the first step in being able to tell your money where to go. If you don’t already know where it is going you will not be able to gain control over it.
Tracking your spending doesn’t have to be difficult. There are a lot of great tools out there that can help automate the process. We love tracking our money at Mint.com
If you are trying to reach financial independence the first step in that journey is to track your spending. Learn more about the steps towards reaching financial independence in this article here.
2) Not Being Ready for Emergencies
If you have ever experienced an emergency that has wiped away your savings, you understand how devastating it can be to not have an emergency fund in place. Maybe you are fortunate enough to have not learned this lesson the hard way yet. Whatever place you are in, I’m here to tell you that emergency funds are very important.
When you are prepared for emergencies you won’t have to dig into your retirement funds or go into debt to cover expenses.
Don’t have an emergency fund yet? Learn how to start one and where to keep your emergency fund in this article.
3) Not Sticking to a Budget
Okay so maybe you have a budget in place, but you don’t check it often to make sure you’re staying within your spending limits.
The whole idea of a budget is to help you gain control over your money and to tell it where to go. If you’re not checking your budget regularly then there is no way you are sticking to it.
Make it a habit to check your budget regularly. Once a month might be good, but more regularly is better! Try making it a habit to check in on your budget at least 3 times a month.
Need budget spreadsheets? Get my favorite ones here!
4) Letting Emotions Drive All Your Purchases
Emotions are not bad. There are many times where our emotions help us make important decisions. However, if you are letting your emotions drive all of your purchases, you will steer yourself in the wrong direction financially.
Emotional purchase may come in different forms…
- You feel like you deserve the next new gadget
- You feel like your old electronic isn’t “in” anymore
- You see a friend showing off their new purchase and you want to have one too
- You want to eat out but have plenty of food to make dinner at home
- You find a really cute decoration that would look adorable on your mantle
5) Making Quick Purchase Decisions
Making quick purchase decisions typically goes hand in hand with emotional purchases. You feel like you deserve something so you go out and get it immediately without a second thought.
If you are wanting to purchase something and can wait a little while, give it a week to think it over. Make sure that the purchase is absolutely necessary. This will help the emotions fade away to reveal the truth.
6) Paying Full Price For Things You Can Get For Free or Discounted
Stop paying for things that you can get for free. And stop paying full price for things that you can get for a discount.
There are so many ways to get things for free now. For example, I recently canceled my gym membership because I was able to find a lot of great workout videos online for FREE.
Learn about different things that you can get for free in this article.
7) Not Taking Advantage Of Cash Back Opportunities
One of the simplest ways to earn money and build wealth is through maximizing cash back opportunities. There are plenty of different apps and programs out there to help you get money back while shopping.
The key to maximizing your cash back opportunities is to check them out before making purchases and to never opt to buy something more expensive just to get the cash back.
Check out these cash back apps that you should start using to max out your earning potential.
8) Not Talking About Money
One conventional assumption about money is that it is taboo to talk about it!
However, the best way to learn about money is to talk about it with others who are finding success in their money management. Having discussions about money will help introduce you to new ideas and broaden your financial horizons.
By talking about money with my friends, I learned more about the benefits of an HSA and then opened one up. I also learned more about Money Market Accounts and why they are a great place to put your emergency fund.
I would not have learned these things without having the conversations. So, don’t be afraid to talk to your friends and family about money. You may be surprised at what you may learn!
You’re invited to join our FREE faith-based community where we are talking about how the Bible impacts our money decisions.
9) Carrying Credit Card Debt
Are you buying things on your credit card that you can’t actually afford? If you buy a new cell phone for $300 and don’t pay off your credit card, you could end up paying $400-$500 for that new phone.
Instead, use your credit cards more like debit cards. Only buy things that you can actually afford right here and now. Then pay off the full amount and not just the minimum credit card payment.
Do you have debt? Decide now that you will pay it off sooner than later. You can start by picking a debt payoff strategy today!
10) Ignoring Your Debt
Debt sucks. I know. But it won’t go away if you just ignore it. Creating an action plan to tackle your debt is important. Can you knock off a few months or years by paying a little extra each month?
Whether it is student loan debt, car payments, a mortgage, or whatever, don’t just ignore it. Maybe you can start a new side hustle and put all the earnings towards your debt or stop spending money on coffee every day and put that money towards your debt.
Learn more about why it’s important, as Christians, to pay off our debt early here.
11) Eating Out Instead of Cooking In
Don’t get me wrong, we love a nice dinner out every now and then. But if you make eating out a habit to cover for your laziness, you will surely continue to live paycheck to paycheck.
Not only will cooking your own meals save you money, but it will do wonders for your health. Less sugar and fat means a healthier lifestyle. Protecting your health like that is also a form of insurance and in turn, will help save you money on medical bills in the future by avoiding major health risks.
12) Buying Name Brand
Every time you make a purchase you have a choice. In fact, you typically have multiple choices! And if you choose to spend your money on brand name items all the time, your money will definitely dwindle away quickly.
You have a choice when you buy your groceries, cleaners, household items, clothing, and coffee. Most of the generic brands of these things get the job done just as well as the name brand things!
I encourage you to consider the purchases you make, are you a name brand shopper? Are there items you can switch to generic brands?
13) Not Thinking Creatively About Your Finances
Money is a tool. The more we think creatively about how to use this tool the more we will be able to achieve. Set big goals and continue to educate yourself, and learn how to set yourself up for success to meet those goals.
Find out how others are getting creative with their finances and try to implement those lessons into your own money journey. There is nothing wrong with modeling your financial journey off of those who have done it already.
But start getting creative today!
14) Not Praying Over Your Finances
Prayer is always an important part of redeeming anything in your life. If you’re not already praying for over your finances I would encourage you to start now! It’s never too late to invite the Lord to help you redeem your situation.
Learn how to pray over your finances here.
So do you have any one of these bad money habits? Don’t worry, you can still change your financial outcome by making some changes to your money habits today. Even the smallest changes can make huge impacts.
Looking for accountability on your financial journey?
Join our FREE community, Redeeming Your Finances, designed for young professionals working on financial independence God’s way!
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