By breaking these bad money habits, you’ll be able to attain financial independence in the future. Here are eight habits to break to get there.
If you find yourself living paycheck to paycheck, it’s time for a change. It may seem impossible to break these habits, but it’s not. All it takes is some organization and dedication. You may have grown up with these habits, but that doesn’t mean you have to continue them forever.
Breaking bad money habits
One of the major problems with a lot of people’s lives is that they spend all of their money without any idea of what they have leftover. Imagine going out to dinner and having to leave most of the tip money.
Imagine going to the movies and dropping all of the money you have left on popcorn. The answer is you wouldn’t do it. Unfortunately, this is how most people live their lives, and they end up with bad money habits.
Sure – spend a little money on yourself every once in a while. But at least save a month in advance of the month that you’re going to need the money.
Eight bad money habits to break
In order to have a healthy financial future, you’ll need to break some bad money habits. Here are eight of the most common ones to watch out for. Skipping over bills, underestimating expenses, and not having a budget can all lead to serious money problems down the road.
So make a commitment today to break these bad habits and start taking control of your finances. You’ll be glad you did!
Seek out free entertainment
Spending too much on a new game, movie, or online shopping? Not only does this take up a large chunk of your time, but it’s not particularly productive. Instead, get out there and join the community. Once a week, go to your local park and play with the kids.
If you’re in a big city, go check out the local art galleries and hang out in a cafe. Take advantage of free entertainment in your city.
Bad money habits saying yes all the time to expenses!
It’s a lot easier to spend your money on others than it is to make it on your own. If you start making more money, you’ll have less time and more of an incentive to spend it.
Take this scenario: you know you’re tight on money, so, don’t just say yes to a drinking session with friends. When you have nothing to spend with, tell them you’ll make it the next time.
Pay your bills on time
Not paying your bills on time is a sign that something is seriously wrong with your financial situation. Avoid putting off paying your bills until the last minute. Make a point of contacting the creditors you owe to ensure you aren’t overcharged.
If you get stuck with an unexpected bill, having the money to pay it immediately will make it much easier to avoid negative credit.
Make a budget
This may seem like a rhetoric need, but it’s so important. Another one of the many bad money habits to break? Forgetting your budget. A budget will help you see where all your money is going and what it is you’re trying to accomplish.
When you see where all your money goes, you can choose to cut some things from your budget and still come out ahead. This is the most important step in getting out of a bad financial situation.
Save up for a rainy day
There is an old saying that says “You don’t miss your water until your well runs dry.” Most people have this idea ingrained in their minds, and it’s holding them back from building wealth.
If you can’t keep a couple of pesos in your pocket for a rainy day, then you’re certainly not ready for the future. You need to save. Start with a 20 percent savings from your salary. Commit to living within your means, and your future will be secure.
Use credit cards wisely
Credit cards are great for getting new clothes, going on vacation, or buying hefty price-tagged equipment. But there’s a reason why you have a credit card. It helps you pay for things. Why use plastic to buy things you can buy in cash?
Don’t use credit cards until you need them. When you can’t get cash, you’ll have to get in the habit of using it. After a while, you’ll never want to go back to credit.
And – you don’t need eight different credit cards. But it’s not all bad. Credit cards are awesome for emergencies. But, only if you can pay them.
Build up an emergency fund
Creating an emergency fund is important when you’re just getting started with your finances. Imagine the inconvenience of having to scramble for cash when an unexpected expense arises. If you put P50,000 away and it’s gone, you’re out of luck until your next pay period.
When you have an emergency fund, you can pay for that unexpected expense without worrying about having enough money in your savings account. If you have a bank account for emergency purposes, then set aside at least three months’ worth of emergency funds in it to keep you covered for a short time.
Invest, invest, invest
No, I’m not saying invest your entire life savings in stocks. What I am saying is to start small. Set aside a small amount of money each month to invest in a retirement account or other savings account. This will give you the confidence to invest larger amounts in the future.
Buy what you can afford, not what you want
Buying things you don’t need only keeps you from being able to save money for a big purchase or purchase. Instead of buying things you want when you see them in the store, try to get them on sale or pay cash.
You’ll find that the money you saved from not buying something else could be applied toward the purchase of the new item that you want. Have a standard amount to spend on everything. Some things can be considered “luxuries.
