We all have bad habits. Some of us stay up a bit too late each night. Others work too much or snack when they aren’t hungry (guilty!). Some bad habits are small and relatively harmless, while others can affect your health or well-being a great deal. But some of the worst bad habits don’t necessarily have to do with health– they have to do with finances.
Think about the way you spend money. Do you follow your budget perfectly, spending only as much as you make and saving an ideal amount each month? If so, you’re a financial wizard and don’t need to read any further.
If not, you– like most of the rest of us– have at least one bad financial habit that could be broken. Here are some of the most common budget-busting bad habits you should try to break as soon as possible:
Dipping Into Savings
Living paycheck to paycheck is no easy feat. It takes a serious commitment to create a budget and stick to it– something not everyone is great at. Some people find the lifestyle easier than others, but inevitably, no matter how good you are at it, you’ll need to dip into your savings at one point or another.
You have money saved up for a reason, so if you’re withdrawing from savings for an emergency purchase or an unexpected necessity, that’s one thing. But if you’re taking money out of savings because you ran out of money and there are still a couple of days until your next paycheck, that’s different. The worst part about this practice? It’s one of the hardest bad habits to break once you start. Do your best to stick to your budget and avoid that slippery slope altogether.
Embracing Credit a Little Too Much …
Similarly, many people lean on their credit cards when they’re earning a starting salary. While credit cards are useful tools, maxing them out is a financial burden you want to avoid as much as possible. And the more you spend on your credit card, the longer it will take you to pay off the balance, which means you’re basically throwing money away for the interest you’re being charged.
If you know you’re likely to get into bad credit habits, force yourself to spend only as much as you can pay back right away– that way, you’ll avoid debt.
… And Paying the Minimum
Don’t forget that if you do have more on your credit card than you can pay back immediately, it’s a bad idea to pay only the minimum required each month. As bad habits go, this one is costly.
Think of it this way: If you pay twice the minimum payment each month, you’ll pay a fraction of the interest you would have. That could mean saving hundreds!
Failing to Account for Smaller Purchases
Are you a coffee-shop-before-work-every-day kind of person? Or someone who would rather buy lunch than bring it from home? While these things may be delicious and convenient, they’re certainly bad habits that could be costing a lot of money.
Even if you buy a simple black coffee every morning for a year, that’s a good $500 or $600 down the drain– a more complicated drink makes that total skyrocket. Though the purchases may seem small at the time, make sure you’re keeping track of every last penny spent. And if you need to, cut down on those small expenses.
Grocery Shopping Without a Plan
Buying groceries rather than eating out for every meal is a great way to spend money. However, grocery shopping can be a source of money-related bad habits. For one thing, many people spend more than they budget on impulse buys (like those frozen taquitos that are on sale). Avoid this by making a list before heading to the store and buying only what’s on it.
Another common grocery shopping issue? Buying food you won’t eat before its expiration date. If you notice yourself throwing away food from your fridge regularly, you may need to start planning your meals and grocery shopping a little better.
When I have a bad day, nothing makes me feel better than a quick shopping trip or drowning my sorrows in Thai food (crab rangoons are my Achilles’ heel). But as good as emotional purchasing may feel, it’s hard on your bank account.
Limit these expenditures when possible, or work them into your budget if you know you’re in for a stressful week or month.
Paying Bills Manually
Believe it or not, if you’re still paying your bills yourself each month, you may be costing yourself some money. Between rent, electricity, cable, Internet, gas, and everything else, keeping track of bills can be tough– and not keeping track carefully enough can lead to expensive late charges.
Automate as much as you can. You’ll avoid late fees, but you’ll also find you’re less stressed about bills each month.