Bad or weak financial habits, like bad eating habits, have bad results.
No one plans on developing bad financial habits. No one wants to deal with the results of bad financial habits either. Just like no one wants to deal with the results of poor eating habits. But the fact remains that if you eat poorly you are unhealthy; if you have bad financial habits, you are financially unhealthy.
Bad financial habits can cause you serious damage long-term; your financial health will suffer and you won’t get ahead financially.
You can turn bad habits around and develop the skill and discipline to control your financial habits; you may just need some guidance. Review the following top financial habits that are within your control.
Financial Habits That You Control
#1 – Spending Habits: You have complete control over how you spend your money.
The Weak Spending Habits.
- Impulsive buying.
- Careless spending.
- This type of buying is very easy to do with the availability of online shopping.
- You’re left with huge credit card bills.
- You have stuff you don’t need, that you owe money on.
- By the time you pay off the credit card bill, you end up paying more for the item that it’s worth.
The Better Spending Habits.
- Before you go shopping – make a shopping list.
- When online shopping, walk away and go back to it. Asking yourself if the purchase is a need or want.
- To prevent careless spending, have a firm understanding of the difference between needs and wants.
#2 – Credit Habits: You control how you use your credit cards.
The Weak Credit Habits.
- Nearly maxing out your credit cards.
- Exceeding the limits on your credit cards.
- Make late credit card payments.
The Result of Weak Credit Habits.
- You end up with a terrible credit score.
- Credit scores determine what you pay for things.
- A good credit score will save you money.
- A good credit score is one above 750.
- With a credit score below 750, you will pay higher interest rates on car loans, student loans, mortgages.
- Your landlord can charge you a higher rent amount.
- With a poor credit score you will also pay more in auto insurance, rental insurance and homeowners insurance.
- Seek out credit repair services if you need credit repair help.
The Better Credit Habits.
- Never allow your spending to get so out of control that you get even close to the maximum available credit on your credit cards.
- Never use the maximum credit on all the credit cards at once.
- Always making your credit card payments on time, even if you only make the minimum payment.
#3 – Investing Habits: You control how much you invest.
The Weak Investing Habits.
- You don’t save money.
- You spend everything you make.
- You have nothing left to save after expenses.
- You live from paycheck to paycheck because you have expanded your spending to meet your earnings.
- You will never get ahead financially.
The Better Investment Habits.
- Live below your means vs living from paycheck to paycheck.
- Stop buying coffee on the way into work, stop eating lunch out of the office, bring your lunch.
- Take that extra money you saved from the coffees and lunches and invest it.
- Invest some money every time you get paid, even it it’s just a little bit.
- If you get a raise or a bonus, invest it, don’t spend it.
- Have your investment money come automatically out of your paycheck.
- Your investments take time to accumulate, build them a little at a time…with some money from every paycheck.
- If you invest into a 401k plan offered at work and there is matching, you get free money.
You have all the control over your spending, credit and investment habits. Take charge, it will make a difference in financial future.