Dropping old habits can be difficult, especially challenging if it has to do with money habits. If you notice that you are generally bad with money or have a poor savings culture, now is an excellent time to start working towards a healthier financial lifestyle. Developing healthy money habits can set you up for economic success in the future and help you achieve your goals in the long run. Although this may not happen overnight, there are steps that you can take to transition into a healthier financial situation and drop old money habits.
Accumulating Credit Card Debt
Getting a credit card can either set you up for success or lead you to ruin, but using it irresponsibly can lead you to fall into credit card debt, and this is one of the most expensive bad money habits you can have. High-interest credit cards can cost you more in the long run.
Excessive Retail Therapy
With the recent surge in COVID, its variants, and the general healthcare crisis, online shopping has also experienced a surge. This surge can also lead to unnecessary spending and especially, online shopping. If you observe this, now is the time to drop the habit and focus on building financial self-control.
Unplanned Purchases
Instagram, Facebook, and other online platforms have a lot of ads with a variety of items that are tailored to your browsing history. This retail tactic is intentional and is set up to make you spend money that you did not plan to spend, and these expenses can add up over time; learning how to curb your shopping can help you down the line.
Keeping Up With The Joneses
Having the wrong set of friends and company around you can influence you to try too hard by straining your finances and causing you to live outside of your means. If you find yourself buying things to impress other people, you may end up in financial disaster. Remember, you don’t need to impress people around you with what you own, and if you find yourself doing this, you may need to reexamine your friendships.
Not Monitoring Your Spending
If you do not have a clear idea of how much money you spend monthly, you will eventually lose track of what you spend on car payments, insurance, mortgage, and other living necessities. Thanks to technology, numerous apps can help you keep tabs on where your money is going.
Making Late Payments
Procrastinating or spending money on other items can feel more pressing than catching up on your bills, but prioritizing unnecessary spending over your necessary items will put you in a bad situation financially. When you get into the habit of not paying your bills on time, it can take a long time to recover, which will negatively impact your credit score.
Spending More Than You Earn
Spending from your paycheck without consciously thinking about it can become addictive. In the age of the pandemic, overspending can become a bad habit to slip into easily. An effective way to get rid of this habit is to create a budget and stick to it. Keeping track of how much you earn will make it easy to keep your necessities and savings in check and keep a closer eye on impulsive spending.
Not Saving Smart
Whether you’re 20, 30, or 40, it is crucial to make an effort to open a savings account specifically for your retirement or other long-term goals. A savings account is an excellent tool for planning trips or investing in down payments for an asset long-term asset such as a home. It will also be worth your while in investing in classes about how to invest effectively and save. Also, whether you choose a 401k, an IRA, or both, try to take advantage of any free money that your employer may offer.
Ignoring Cybersecurity
In 2022, make an effort to be proactive about financial cybersecurity. To protect yourself and your money from identity theft, you need to be proactive and know where all of your accounts are, including student loans, credit cards, retirement, and banking. Multi-factor authentication can help you effectively monitor your accounts and take safety precautions to stay safe online.
Leaving Money On The Table
It can be intimidating to ask for what you are worth in the professional world, especially for women. One thing to leave behind in 2022 is to avoid being underpaid for your work and skillset. It is important to ask for a raise you deserve and get the money into your pocket no matter who your employer is.