We all have financial habits that we wish we could break. We know they’re not doing us any good, contributing to debt, and not helping us reach our financial goals, but breaking them can be easier said than done. Bad habits haunt us in all aspects of our lives, and when it comes to your finances, there are tons of ways we’re spending our hard earned cash that are holding us back. For example:
Not using your credit cards wisely can result in a financial headache. On top of that, if you’re only making the minimum payments required on your credit card, you’re likely only paying the interest from bill to bill, and not actually tackling your debt, but accumulating more debt. Getting out of this habit of making only minimum payments is one of the best ways to start making a dent in your debt. Budget wisely and plan to pay off your card in a more effective way.
Ask yourself if it’s something you want or something you need. Are you one of those people who isn’t even looking at the price tag when you see something you like? Do you throw things in your cart as you walk down the grocery store aisle that weren’t on your list? When it comes to spending, staying within budget is key for debt management. As much as you can try and justify your spending mentally, this is what marketers and retailers want you to do. Instead, when you shop, stick to your list and make sure to look for the best deal.
Not Keeping Track
Are you paying attention to your spending habits? Do you have a budget? There are many things you should be keeping track of to ensure you’re paying your bills and not spending outside of your means. Check out this article we wrote on why you should be keeping a spending journal and breaking down where your money is going and coming from to help you keep on top of it.
Are you a person that no matter how hard you try, you still have no luck in saving money? Saving is one of those things that need to become a habit, but we get it, it’s easier said than done. Take a step back and evaluate your spending habits, build yourself a budget, look at your wants versus needs, and figure out how much you have in spare change to throw into your savings. This game can help make it more fun.
The Little Things
It’s always the little extras and add-ons that seem to add up the quickest. Here are some tips to prepare for big purchase spending but usually it’s the everyday and unexpected expenses that always seem to throw you off track in your budget. Here’s the thing, it’s all about creating that wiggle room in your budget for things that may pop-up unexpectedly, and ensuring that you’re not overspending on those unimportant things that aren’t necessities.
Signs You’re Not Good With Money
Maybe you don’t even realize that you have bad money habits. You’re constantly wondering where your money is coming from and going but haven’t really acknowledged that you have a problem. So we put together a few ways to let you know that you may not be as good with your money as you may think.
Do you know how much you earn versus how much you spend?
With money constantly coming in and out of your bank account, it can be hard to stay on top of what’s coming in versus what’s going out. Ask yourself if on the top of your head you can list what your current income is annually, monthly, and biweekly. If you can’t, it’s time to pay more attention to this. On top of knowing your income, you should also know all your expenses each month and how much of that money is coming out of your bank account for bills and mandatory expenses, versus wants.
What’s your budget?
We’re all about staying on budget, and we’ve given many ways to create and track your budget on this blog before. Why do we care about it so much? Because it’s the first step when it comes to saving money. Being on track financially comes from having a budget in place, and figuring out what’s coming in and out, as well as what you’re saving and how. If you don’t have a budget, then it’s time to start one, and if you have a family, it’s important to look at all expenses, not just yours.
Are you surprised by your bills each month?
There have been times where we’re hit with a more expensive bill than we anticipated. A big topic of discussion has been the rising hydro rates in Ontario and how some people cannot afford to pay their utility bills. However, you shouldn’t be surprised by your recurring bills that are the same cost each month like internet, for example, or your credit card bill. Often people just throw things on their credit cards carelessly, forgetting that they’re driving up their debt. Check out these tips to use your credit card wisely.
Are you stressed about money?
One of the biggest signs that help you determine if you’re good with money is if you’re constantly stressing and worrying about your finances. The best thing to do is aim to eliminate financial stress, we know that sounds easier said than done, but it’s the first thing you can do to get better with your money.
What’s your credit score?
What’s your credit score? Do you have no idea? When was the last time you checked? Your credit score can change frequently and you never know when you will need it in required documentation. You may need it for lines of credit, jobs, mortgages, and it’s important to know where you stand with your credit score so it doesn’t hold you back down the line.
Are you living within your means?
Are you living within your means? What does that even mean? It sounds easy, right? Well, shockingly, it’s a lot harder than you may think. People are constantly overspending and thinking that they are spending within their means, when in reality, they’re not. This is especially common with materialistic goods, aka wants versus needs. You always want the latest and greatest device, clothing, hottest trend, etc. that before you know it you’re spending your disposable income on a whole bunch of stuff you didn’t need to survive.
Are you carrying debt?
We all have some form of debt–whether it’s from schooling, or on your credit card. Sometimes it can feel like your debt is a bottomless pit that you can’t get out of. However, you need to change your thinking when it comes to debt. We’ve talked about a few ways to get your debt under control in this article, such as using your credit card wisely, and not just paying the minimum payment, but you also need to have a plan of attack with your debt. Are you just letting it pile up? Or are you actively creating and following a payment plan to make a dent in it? Your debt doesn’t need to weigh you down.
Are you putting off saving?
Are you putting off saving, or don’t feel like you have enough money coming in to put any aside? We’ve all been there. The months we overspend and end up not saving anything. Before this becomes a regular habit, it’s important to get yourself back on track with your savings. No matter what you’re saving for, you need to treat your savings account like a bill that needs to be paid each month no matter what. Don’t try and justify that new pair of shoes for your monthly savings. Before you know it, you’ll see your savings grow if you commit to actively putting dollars in there.
Staying on top of your spending can be challenging, money moves quickly and we all know that because of that, you can’t be financially lazy or it’ll come back and bite you. Here are some of the things you should keep your eye on when it comes to your finances to make sure you’re not missing anything, and you’re making the most of your money.
Check Your Monthly Statement
Technology has made it so much easier to stay on top of your bank accounts. But are you taking advantage of this? Also, just because you can see your current balance, doesn’t mean you’re staying on top of your overall budget or regular monthly statement. Transactions are quick, but can take awhile to show up on your card, so make sure you are fully aware of your monthly statement and how that money is adding up.
Look into loyalty programs for the stores that you’re regularly shopping at. If you’re already shopping at the same gas station, grocery store, etc. then you might as well get rewarded for it. Look into the savings and perks that come with the loyalty programs at the stores you regularly frequent.
Not Bargain Shopping
Who doesn’t love to save money while shopping? Often we have a tendency to buy the first thing we see versus looking for a deal on that item. Doing your homework can really help you save. Look at flyers online at places like Flipp or offline, look for coupons, or try apps that compare pricing like Shopbrain.
Saving Things Until the Last Minute
Maybe it’s always opting for a cab or Uber, instead of taking transit when you’re running late. Too lazy to cook? So you pick-up takeout. In the habit of grabbing your morning coffee at Starbucks versus just making your own? All these things add up and you can easily find a place for the cheaper alternative, if you just gave yourself more time. Better planning can help you save quickly.
Everyone has their own habits they are trying to break when it comes to their finances. This article will help you identify whether or not you’re good with money, and ways that you can improve. Also, don’t forget that GoDay is always there for you to help you with payday loans in Ottawa and beyond.
Do you have great tips to help break those bad money habits? Share them with us.