How much money you have is often linked to your money habits. For instance, if you like to eat junk food, chances are you over-spend on fast food.
Here are seven bad money habits that you might not even realize you have and how to overcome them in 2017 or any year.
1. Going into debt for wants rather than needs
Lifestyle based purchases, such as luxury handbags or an expensive phone, force you into unnecessary debt if you have to pay for it on a payment plan. If your wants continually push you into debt, you have a habit that you need to get rid of.
Cure: Debt is for essential and strategic purchases only. Going into manageable debt to buy a house or pay for your children’s education is fine. It’s not OK when you use debt to fund a luxury lifestyle.
2. Postponing financial decisions
How many times have you told yourself, “I will start investing next month” only to continually push it back every month because you did not save any money? Postponing good financial decisions is worse than making bad ones. With time, good investments generate additional income for you, so the earlier you start, the more you make.
Cure: Start setting aside money every month to put towards investments. The longer you delay, the less you’ll make in the long run.
3. Gambling rather than investing
Many people tend to dabble in the stock market without knowing what they’re doing. Maybe you got a tip that a particular stock is a good bet, or someone told you that Options are a great way to make money. But, if you’re putting your money into investments that you don’t understand, you are gambling and not investing.
Cure: Investments should be based on your goals. If you don’t know how to invest, hire a professional to help you or take a course.
4. Spending more than what you make
This is the worst habit for your financial well-being, when you constantly spend beyond your means. When the money you spend exceeds your income at the end of the month, you are overspending.
Cure: Start monitoring your spending habits. Take a look at your expenses and separate them into two categories – needs and wants. Cut out what you don’t absolutely need. Create a budget to get your spending under control.
5. Paying your bills after the due date
If you are constantly making late payments on your credit cards and utility bills, you are paying more than you need to, and it adds up. In case of credit cards, late payments could potentially add up to hundreds, thanks to high interest rates.
Cure: Always pay your bills on time to avoid late fees. Set up auto pay for your bills to ensure you don’t pay them late.
6. Indulging in habits that are expensive
Smoking, drinking, and eating out too often are habits that come with a significant price tag. You might think these expenses as small, but over time, they add up to significant amounts.
Cure: If you have a habit that has a negative impact on your health and your wallet, it’s time to break it. Get help if you need to, but your body and your wallet will thank you in the long run..
7. Not saving regularly
Saving regularly can be difficult. Especially if you tend to spend first and save whatever is left over.
Cure: Decide on how much you can save on a regular basis and set it aside as soon as you get paid. This will ensure that saving becomes a habit.