How to break bad financial habits
JOSH MASCARIÑAS
Living an independent life means you need to earn money to sustain your needs and wants.
Receiving your monthly salary seems to be a one-day reward knowing you can splurge it on impulse buys or use it to pay off existing debts.
Perhaps you can’t get a grip on your finances if you’ll just continue committing the same financial mistakes.
Much worse, repeated actions can turn into habits that can lead you to financial trouble.
However, New York Times business writer and The Power of Habit author Charles Duhigg said it’s never too late to end a habit for it is “malleable” in your entire life.
CNBC International’s personal finance writer Jill Cornfield laid out some unwanted financial habits and ways to eradicate them. “You lack the budget”, she said, “that’s a habit you unconsciously do.”
You may feel “old-fashioned” fulfilling it but Cornfield believes that a “budget is essential.”
If you find yourself giving excuses as to why you don’t have a budget, Elias Janetis, founder and CEO of Squeeze.com warranted that there’s no good defense in justifying the absence of a budget in your everyday life.
To combat this, regularly review expenses as what Steward Partners’ certified financial planner Todd Hoffman instructed.
In addition, you can avoid “getting too far off track” with the aid of a prepared budget. Dealing with budget preparation and allocation can determine existing financial problems like falling short of funds. After all, budgeting is also about purchasing items in order of importance, need, and value.
Cornfield also mentioned that shopping without a list is a bad financial habit because it often leads to impulse spending.
Spur-of-the-moment purchases can curb your salary and negatively affect your savings. Tolerating this habit will ruin your budget in the long run.
You can’t just list shopping acquisitions without having to deal with budgeting. Budgeting comes first then listing items follows.
Comparing prices can also help when listing down low-cost and economical items. If you plan to subscribe to recurring services like an internet and cable connection, select the one that is cheap but has good reviews.
You can also check out comparison websites like MoneyMax.ph to see a product’s specifications and prices.
Simply put, listing down items and services to purchase is all about finding the best deals.
NerdWallet staff writer Kevin Voigt said using a credit card is like using “free money.” He explained that a credit card is the root of bad money habits – and you should get rid of them before your credit card shoots you at the foot.
It’s not to refrain you from using your credit card. It’s just to remind you to use it responsibly so you won’t accrue penalties and charges.
You have the choice to leave your credit card at home to battle the temptation of a swift credit card swipe. For regular purchases like groceries and gas, use cash or your debit card instead. This also applies to daily purchases.
Repeatedly saying that it’s hard to save money needs to stop, Voigt suggested. You habitually convince yourself that 10% of your salary needs to be saved. But at the end of the month, you barely manage to succeed because you keep on complaining.
“Old habits die hard, and one of the oldest habits is using checks to pay bills or make savings deposits,” Voigt claimed. Going back to this practice will unleash good money habits in you.
Saving money is a basic rule in personal finance. Do not think that you always need to reward yourself. Wait and see the result of saving money in the forthcoming years and your diligence will soon pay off.
These may be awful habits but there are solutions to end them. Breaking your bad financial habits will demand you time and effort so keep in mind the benefits you may receive in the long run.
Josh Mascariñas is a content writer at MoneyMax.ph. Save money on car insurance, credit cards, and loans when you compare and apply at www.moneymax.ph! Visit our website to know more.
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