Bad money habits can quickly derail your financial plans. Some bad habits are so ingrained that you may not even realize you’re doing them. William Schantz of Mid Atlantic Financial LLC shares 8 of the most common – and harmful – money habits:
Not Having a Budget
It isn’t easy to make sound financial decisions if you don’t know where your money is going. A budget gives you a roadmap for your finances, telling you where you can – and should – be spending your money. Without one, it’s too easy to overspend and find yourself in debt.
Using Credit Cards for Everyday Purchases
Credit cards can be helpful when used wisely but can also be dangerous. If you’re using credit cards for everyday purchases, you’re probably not paying off your balance in full each month. This can lead to costly interest charges and put you in debt. It’s better to use cash or a debit card for everyday expenses to stay on top of your spending.
Not Saving for Emergencies
An emergency fund is a key to financial stability. Without one, you may have to rely on credit cards or loans to cover unexpected costs. This can add unnecessary stress to your life and make it difficult to get ahead financially. Try to save at least 3-6 months of living expenses from knowing you have a cushion in an emergency.
Not Investing for the Future
Investing is one of the smartest things you can do for your future. But many people avoid investing, thinking it’s too complicated or risky. The truth is that plenty of simple and safe ways to invest can help you reach your financial goals. If you’re unsure where to start, talk to a financial advisor who can help you create a personalized investment plan.
Paying Too Much in Fees and Taxes
Fees and taxes can eat away your hard-earned money if you’re not careful. Make sure you’re not paying more than you need to by shopping around for the best deals on financial products and services. And be sure to take advantage of any tax breaks you’re entitled to. A little effort can go a long way in saving you money.
Not Staying disciplined with Debt Repayment
If you’re carrying debt, staying disciplined with your repayment plan is important. As per William Schantz, missing payments can damage your credit score and lead to costly late fees. If you’re having trouble making ends meet, talk to your creditors about adjusting your payment schedule or exploring other options. The sooner you get on track with debt repayment, the better off your finances will be.
It’s easy to get caught up in the moment and make an impulse purchase that you later regret. Whether it’s a new gadget, a piece of clothing, or something else, resist the urge to buy on a whim. Take some time to consider whether you need or want the item. If you can wait a day or two, you’ll realize you don’t need it after all.
Not Reviewing Your Finances Regularly
You can’t make sound financial decisions if you’re not keeping tabs on your money. Make it a habit to review your bank statements and investment portfolios regularly. This will help you spot fraudulent activity and identify opportunities to save or invest more wisely.
So there you have it; William Schantz has provided you with 8 helpful tips on avoiding bad money habits. By following these simple tips, you can improve your financial situation and secure your future.
If you’re guilty of any of these bad money habits, don’t despair. You can make changes to improve your financial health. Just take things one step at a time and be patient – you’ll get there eventually.