Bad money habits can be a source of great frustration and harm. These habits can hurt your credit and finances, leaving you with no cash to cover your emergency expenses.
If you want to enjoy financial security and provide a decent standard of living for your family, you need to break bad money habits ASAP This is because bad money habits can prevent you from reaching your financial goals while setting you up for failure.
You need to work on replacing bad money habits with positive ones in order to meet your financial goals.
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.
Not having a budget takes away a key to controlling your finances and ensuring your short-term and long-term financial needs are met.
Create a budget to drive your financial decisions and ensure that you are towing the right path. 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.
Not Spending Wisely
Spending money on non-essential things leaves less money to put towards essential items like rent, loans, or setting aside money for retirement.
This poor spending decision can add up quickly and cause you to run out of money fast. No matter how great they sound, avoid all needless discounts, sales, special offers, and rewards.
Nonessential spending is not something you have to eliminate entirely, but it is important to take a good look at it and cut back where you can. Before you purchase anything, take a moment or 24 hours to think about how much you need or want this item.
Not Setting Aside Money For Emergencies
Emergencies pop up when you least expect them – that’s why they are called emergencies, right? Whether it’s an accident, car issue, or urgent hospital bills, an emergency can easily set you back thousands of dollars.
And if your financial reserve isn’t strong enough, these emergencies can affect your budget for years to come.
Don’t beat yourself up if you don’t have an emergency fund. You should set one up ASAP and start stocking money in it. Your emergency savings account should be separate from your other accounts so that you don’t go into it for day-to-day spending.
A standard sum for an emergency fund is three to six months’ worth of living expenses.
Not Saving Even When You Can Afford To
Everyone has goals which could be buying a house, training their kids through college, or planning for retirement. These goals typically require years of planning and decades of saving to achieve, so the earlier you begin the better.
Paying yourself first by saving money before you spend any money is the best way to protect your finances and reach your goals.
At Rosabon Financial Services we have different saving plans that can help you save more without even thinking about it. Our plans are affordable and you don’t need to wait to “have more” before you start saving.
No matter how tight your current budget is, we have a plan for you.
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.
Out-of-control credit card spending can lead to some major problems including running up high-interest credit card debt, giving you a false sense of how much money you’ve got available to spend, and taking cash away from your emergency fund.
Making and sticking to a thoughtfully-crafted, realistic, and practical budget is a good way to manage your credit card spending.
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.