Table of Contents
- 1 Here are 9 Bad Money Habits You Should Work On To Achieve Your Money Goals.
- 2 How To Curb Your Bad Money Habits
This post will be sharing 9 bad money habits that are preventing you from achieving your money goals.
A lot of us have grandiose money goals that we hope to achieve someday; one way or another. But the problem is, we’re so focused on the future and we’re not addressing the daily habits that could potentially hinder our goals. For instance, if you plan to start investing in startups by age 30 and you currently still struggle with minor issues like sticking to your weekly budget, then you might not be able to achieve that goal as fast as you want. Technically, that’s not completely a bad thing. But the thing is we get to lose out on the personal fulfilment that comes with smashing our goals.
Personally, I’ve been able to achieve my money goals because I have a good relationship with money. I’ve built my self-discipline to a point that I barely overspend or go over my budget. I mean how else would I have been able to start a business, save up and move to a new country before 25?
So, if you’re struggling with bad money habits and you’re ready to identify them and make the necessary improvements, then this post is for you.
Here are 9 Bad Money Habits You Should Work On To Achieve Your Money Goals.
In no particular order;
A lot of us are guilty of going way out of out budgets. Myself included. When it happens a few times, it’s actually fine but when it becomes a habit, that’s when it becomes a problem. Most of us underestmate the power habits have on our lives.
To fix this, create a budget and train yourself to stick to it. If you’re anything like me, you’ll have a budget for everything. So, whatever you want to buy, wherever you want to go, always make sure you have a budget to reduce your chances of overspending.
Not having a budget at all
Budgeting might be over flogged but there’s a reason why it is so key to achieving your financial goals. Creating, following and sticking to your budget helps you create financial discipline. You might not even realize it until it gradually becomes a habit. After a while, it slowly becomes part of you until one day, you realize how much it has saved you in the long run. Yes, every little coin adds up quickly.
If you’re not sure where or how to start budgeting, you will need a Budget Planner. It gives you a step – by step guide on how to create a budget based on your income and lifestyle. It also helps you track your debts, savings, investments and stay on track with your money goals. Get one here.
Late Bill Payments
If you’re not automating your bills in 2021, are you even ready to adult? There’s really no reason why you should be paying your bills late. There are a lot of apps on the market that will help you automate your bills so you’re never late again.
Personally, I use my bank app to automate my bills. This way, I don’t need to think about it or forget to pay them. My payments go out on the same day, at the same time, every single month. As a result of my solid budgets, I always plan my money ahead for your month. That way I’m not tempted to spend it.
Late Credit Card Payments
Still, under bills, another thing that will set up back on your money goals is allowing your credit card debt to pile up. As a personal rule, I never allow myself to rack up any kind of debt. There’s a way debt drags you back because when you eventually become financially free, you have to sort it out first. Instead of investing your money into your future, you spend a huge chunk clearing your debt.
So, if you have the cash, try to pay your credit card bills on time.
Spending Your Emergency Fund
I’m sure you are aware that every employed adult should have an emergency fund of sorts. You need to have at least three months worth of expenses stored away for a rainy day. This could come in form of a job loss, a loss of a loved one or any life-threatening event. When you have already set asides your emergency fund, you have no business spending it on things that are not emergencies.
To fix this, store the money far away from you such that you’ll be charged a fine if you withdraw it for no valid reason. This is what I did to save for my trip. In return, you’ll be helping yourself build financial discipline and live within your means by sticking to your budget.
Not Having Any Form Of Savings
A lot of us don’t have savings because we believe that we don’t earn enough. The truth is, even when you eventually start to earn enough, you’ll still struggle to save because you haven’t adopted a saving habit. It’s as simple as that. A huge chunk of being financially disciplined boils down to your money habits.
To fix this, start by saving your loose change. If you use a bank app, find out if you can automate your savings. Anytime you make a purchase, the app will save the change for you. Don’t think about how little the money is because it adds up quickly. Another way to learn to save is to be intentional about your savings. Look at your budget and find areas where you can save some money. If you can’t really find much, then it’s time to get a second source of income.
If you’re struggling with your Personal Finance and you’re not sure how to ditch your bad money habits, improve your money mindset and achieve your financial goals, then I highly recommend the Clever Girl Finance book.
Paying For Unused Subscriptions
I saw a tweet the other day where someone said the market of people that forget to cancel their free trial for subscriptions is worth billions. Stop paying for subscriptions you never use. You’re literally giving your hard-earned money to these big corporations. Every quarter, I like to streamline my subscriptions, If I haven’t used it in three months, it is getting cancelled. Sometimes, if I have a backlog to cover e.g books, I pause my subscription until I’m done with my current books.
Not Having Any Form Of Investments
This is one area I’m really slacking but it’s because I’ve moved countries and my previous investments are not profitable for my current financial situation. So, I still need to do a bit more research which is where I’m currently at. With all the information available at your disposal, you have no excuse to not have an investment portfolio in 2021.
I’m currently reading Grow Your Money; a personal investment book by a Certified Financial Expert for beginners who want to learn the basic foundations of investing. I definitely recommend it.
Not Organizing Your Financial Records.
Some of us are really bad at organization that we have to turn our homes upside down to find certain documents. This should not be the case. At every point in time, you should know where your financial records are at all time. If you’re not sure what they comprise of, they are;
- Birth Certificates & Passports
- Tax returns
- Loan documents
- Banking & Investment Details
- Social Security Cards
- Insurance policies
- Bank statements
- Bill payment records.
If you’re organizing your records digitally, make sure it’s in a reputable encrypted cloud account. For the physical copies, get a fireproof file organizer to secure your documents.
How To Curb Your Bad Money Habits
Now that you’re aware of some of your bad money habits, how do you curb them? What are the steps you need to take to intentional curb them?
- Identify and make a list of all your bad money habits that you can remember. If you’re not quite sure what they are, go over your bank statements and review your spending habits.
- For each habit, write down the triggers or behaviours that tempt you to give in to this habit. Personally, mine is charity stores. I’m always tempted to go into one of them. When I know it’s not in my budget, I intentionally avoid the route. This helps me stay focused.
- Come up with an alternative plan of action when you’re triggered to engage in those habits. E.g Take a different route or avoid the area entirely if you can.
- Create a reward system for being consistent and not returning to your old habits. For me, this means splurging on a budgeted charity store haul once in six weeks as opposed to my bad habit of visiting every week.
I hope this post and resources have helped you to identify and curb your bad money habits which are preventing you from achieving your money goals.