Are You Guilty of These Bad Money Habits?

DO YOU KEEP TELLING yourself, “I’ll figure it out later”?

Do you constantly make little purchases, telling yourself they don’t count?

These are just a few examples of common – and risky – behaviors that can damage your financial health. Nearly everyone has bad habits when it comes to their money. But the key to managing your money appropriately lies in preventing them from seriously damaging your long-term financial security.

Here are a few behaviors you may not realize can hurt you in the long-run, and a few solutions to help keep you on a path toward financial security.

Blissful ignorance. You may know the old adage “ignorance is bliss,” but ignoring your bills and not understanding your finances can quickly lead you down a financial hole from which it will be hard to dig yourself out. Imagine the blissful feeling that comes from financial independence and security. The first step in getting serious about your finances is taking account of how much money you have coming in, then understanding how you’re spending it. Using personal finance apps can help you figure out the full picture by showing you all of your accounts in one place. Once you understand how you’re spending money and how you should save, you can use the personal finance apps to set a budget that fits your lifestyle. Stay in the know by using app notifications to get updates on when your bills are due and when you’re getting close to your budget each month.

Procrastination. Are you someone who prides yourself on living in the moment? Do you tell yourself that you’ll start building your savings after your next raise or when you get a new job? Your financial future is just as important as – if not more than – your current financial situation, which is why it’s so important to stash away money for savings. Even if you can only afford $20 each month, you have to start somewhere. As a rule of thumb, try to follow the 50/30/20 rule, which is a proportional guideline that can help keep your spending in alignment with your savings goals. This means you should set aside no more than half of your income for the absolute necessities in your life such as housing, food and transportation. Then you should dedicate 20 percent of your take-home pay toward saving and 30 percent for expenses that enhance your lifestyle but aren’t essential. These personal lifestyle expenses include items such as shopping, happy hour and trips to the coffee shop. You can start following the 50/30/20 rule at any time, so seize the day and start now.

“Treat yourself” mentality. Splurges are manageable every once in a while – for example, on birthdays and holidays – but they’re called “splurges” for a reason. Because the extravagant purchase is more than what you would usually spend or afford. So keep these purchases in check. Remember that frequently celebrating little wins and treating yourself to small gifts will add up quickly. Try to limit the amount of “treat yourself” moments and reframe the way you think about celebrating. Rather than rushing to the shops or spa, consider meeting up with friends for an outdoor activity or workout class. Just as small splurges can add up, so can saving a few dollars here and there. Keep your long-term goals and financial security in mind while you’re celebrating. You’ll thank yourself later.

Information overload. Do you love subscription services and staying in the know about your favorite brands through company newsletters? Having these offers and flash sales in your inbox every day can easily lead you to spend money on items you don’t need. Retailers and coupon services regularly sending out special discounts can tempt you to buy those pricey leggings with one click because they’re now 15 percent off. But do you really need another pair of leggings? Were you even thinking about them before you saw the email? Pull the plug on services and subscriptions you don’t use and unsubscribe to newsletters that may tempt you to make impulse purchases.

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