10 Bad Money Habits That Rob You Blind – And How to Quit Them
Dropping bad money habits makes it easier to power up your financial life. Following are 10 bad habits, and tips for ending them.
1. Carrying a credit card balance
High interest rates on credit cards make plastic one of the most expensive ways to borrow. Build a better habit: One approach to erasing the card balance is to devote every spare penny to getting rid of it. If you have other pressing debts, you’ll need to make a plan for dealing with all of them. Keep the balance from building again by making it a new habit to pay off the entire bill every month—no exceptions ever.
2. Failing to fund a retirement plan
How much should you save? “Ten percent is the minimum [monthly contribution] for anyone in any situation,” Arlington, Virginia, financial planner Claire Emory tells Women’s Day. Build a better habit: Imagine yourself at age 70 or 80. Picture concrete details—how you’ll look, your surroundings, how you’re spending time, and who’s with you. The more real your future self is to you, the more likely you’ll care for her or him today.
3. Not shopping for monthly services
Hopefully, you comparison shopped when signing up for insurance policies, and phone, Internet, and cable service. But you may be missing savings if you’re not checking prices again once a year. Build a better habit: Be willing to put some energy into improving your financial life. Once a year, spend 30 to 60 minutes price shopping for monthly services.
4. Paying for cable and landline
Cable prices are going nowhere but up. Free and cheaper alternatives make experimenting worthwhile. But will you get out of your rut and try something new? Build a better habit: Before trying a change, just observe yourself and your habits. Record your viewing habits for a week or two to see how and if you’re using the services. Ditto for your landline. If you’re able, drop the landline and use mobile phones only.
5. Ignoring coupons and deal sites
If you aren’t using coupons and checking daily deal sites, you’re spending too much. Build a better habit: Tackle bad habits in small bites. Try just one deal or coupon site. Explore grocery store apps that deliver coupons to your computer or smartphone, and check daily deal message boards like Slickdeals, Groupon, and Woot for cut-rate prices.
6. Playing investing too safe
Safe investing is important. But there’s safe and there’s too safe. Keeping all your money in no-risk accounts means inflation will rob you of spending power. Build a new habit: Learn your investing style by taking an online risk-tolerance quiz. Next, read up on the basics of investing. Then—taking your age and risk tolerance into account—take another look at your investments.
7. Getting hooked on lattes
That $4 latte is killing your budget. One latte a day each workday adds up to $20 a week—$1,040 a year. Build a better habit: Substitute new habits you enjoy for the old ones. A latte is a way of treating yourself, so find treats that don’t bust your budget.
8. Living without an emergency fund
If you don’t have an emergency fund, your life is a highwire act with no safety net. Emergencies are inevitable. Life is full of them. Build a better habit: Make a commitment to the change you want. Write it down and put it where you’ll see it and reinforce your resolve.
9. Buying retail
Paying retail markup is like setting a match to a pile of cash. Smart buyers find ways to avoid it. Build a better habit: Get out of your comfort zone. If you feel pressure to keep up with your friends or neighbors, ask yourself what that’s costing you. Shop at wholesale clubs and bulk stores, garage sales, consignment stores, thrift stores, online auction sites, and classified ads.
10. Using shopping as entertainment
You know people with compulsive shopping habits. Maybe you are one. Spending creates a high that’s addictive and can severely damage your budget and the financial security of your family. But even if you don’t miss the money, the inability to stop can eat away at you. Build a better habit: Try a spending fast, remove your name from catalog lists, stay out of stores, and hang out with friends whose idea of fun doesn’t include shopping.
A Village financial counselor can help you identify and fix bad money habits. Contact us to schedule an appointment.
Reprinted with permission from partner site Moneytalksnews.com