For some people, bankruptcy is for certain. If you are one of them, those overly secure of the thought that they have a regular source of handsome income, so they just keep on spending without keeping track of their expenses.
You’re sure to keep falling off the financial ladder… if you continue spending more than you earn, mindlessly making purchases more than you can actually afford. You absolutely don’t have a shot at getting rich… if you keep making saving a chore for tomorrow, always thinking that you’d always have money to expect anyway.
There are a number of bad financial habits and ways of thinking that have driven lots of people into the depths of financial ruin. Some of them seem too harmless that you wouldn’t even realize how much it could lead to your economic demise. This article is written to give you a heads up on these habits and pull you up before you reach that depressing pit called “bankruptcy”.
Bad Habit: Endless Generosity
Counter-habit: Being practical
Some people are either too easy to persuade or just plain show-offs that they keep treating people or lending them money even when they don’t really have cash to spare. If you’re someone who couldn’t say no to people urging you to pay for the whole department’s dinner or beer party bill, take that habit off your system and get real. Showing that you can pay doesn’t really make you rich.
Bad Habit: Inability to Separate Wants from Needs—Careless Spending
Counter-habit: Thinking a hundred times before buying
You’ve probably heard this a hundred times, but the pull of a want is just too strong—it’s hard not to give in. But think: how many times have you found yourself out of money to pay for your bills after overspending on less important stuff?
Think, rethink and think again before making a purchase. Do you really need it? Can’t it wait a bit longer? Can you survive without it?
Bad Habit: Failure to Track Incoming and Outgoing Money
Counter-habit: Keeping record of income and expenses
Have a record of your income and of how much you are spending. Calculate them regularly to check if you are spending more than you’re earning. Keep your pay slips, receipts and other important documents. These will be helpful should there be problems in your purchases or when there are contentions on your credit card bill.
Bad Habit: Not Paying Bills on Time
Counter-habit: Promptly paying dues
Simply because you missed your bill payment due date, you end up spending more on penalties or late fees—such amount that you could have used on food, spa or other things more worthy of your money. Get rid of this useless spending.
Set up alarms to remind you ahead of the payment deadline so you wouldn’t miss it. You can also set up auto-pay mechanisms for fixed regular bills. Better yet, pay bills the moment you receive them so you wouldn’t have to worry should you get swamped with work or other matters.
Bad Habit: Excessive Use of Credit Card instead of Cash
Counter-habit: Use cash as long as it is available
Use your credit card sparingly. Credit card purchases usually involve interest rates, finance charges and many other fees that you would be spared off if you just use cash. One good practice is not making credit card purchases unless you could actually pay for them in cash at the time of purchase.
Keep your card at home and only bring it if you really have a planned purchase. You can have personal checks with you which you can use at your grocery stores.
Bad Habit: Having No Savings
Saving doesn’t just mean having extra money whenever you want to buy something; it also means having a pool of fund to rely on should there be an emergency. Every payday, make sure to automatically set aside a certain amount for your emergency fund, and for another fund that you can use whenever you want something other than your regular expenses. This “special savings” can also serve as your travel fund, gadget fund, or any other fund for whatever fetish you have. This will keep you from dipping into your emergency fund for things that can’t really be considered as emergencies. Learn how to budget your money such that there are always savings and your actual needs are prioritized.
Finally, in order to really get rid of these habits and ways of thinking, what you need is discipline. Find your motivation. Get somebody to do it with you or somebody who’d keep pushing you whenever you think of giving up. List down reasons why you want to do it and make it an inspiration to work harder.
Take it one step at a time and don’t rush. Psychologists agree that it takes 21-28 straight days to make a habit. Make a list of your goals and try to achieve them one at a time.
Gradual change is usually more effective in trying to eliminate bad habits permanently. Just remember: have discipline, and don’t forget why you have to do it.
What about you readers? Are you taking care of your finances?