We all dream of a world where we can shop like there’s no tomorrow, head off on holiday at the drop of a hat, and never experience any money worries. But short of a major Lotto win, the reality for most of us is that we need to live within our means.
We all aim for better monetary management, but it’s easy to fall into bad financial habits – if that sounds like you, and if your bank account is echoingly empty, then it's time to break those habits.
How do you know if you’ve developed some bad financial habits? Well, here are eight of them to avoid.
1. Too many unpaid credit cards
We get it. Credit cards provide the flexibility we all need in times of emergencies, so more credit cards means, well, more flexibility. But they can be tempting to use for expenses that haven’t popped up in a time of crisis. And if you have the bad habit of not paying off your balance in full each month, that emergency credit card could become a major debt problem. Stop this bad habit and consider consolidating your credit cards, so you only have to make one repayment each month.
2. Overdrawing your account
If you live from payday to payday, it’s easy to become overdrawn on your bank account. The banks love this because they can hit you with overdraft fees, making it even more difficult to keep on top of your finances. So, stop this bad habit and keep a close eye on your bank balance to ensure you don’t become overdrawn – it’s very easy to do if you have direct debits set up to manage your bills.
3. Emotional spending
Have you ever felt like just hitting that “add to cart” button whenever you feel a little down and out? That’s called emotional spending and it’s the spark of joy you get from a little shopping that acts as a pick-me-up. We’re all guilty of it one way or another, but it’s just spur-of-the-moment happiness. Before you know it, your money is gone so if you want true peace of mind, try walking away from that internet browser for a few minutes and ask yourself if that item you want to spend your money on will really make you feel better.
4. Impulse buying
Now, this is different from emotional spending, but both are bad news for your bank account. Impulse buying is when you keep adding things to your cart that are not really planned, thinking that it won’t hurt your budget. For example, if your favourite online store has a sale on, it might be tempting to buy more than you really need because the prices are lower than normal. But if it’s not in the budget, this type of unplanned spending will have a negative affect on your finances.
5. Convenience buying
Yet another type of bad habit spending is convenience buying. And who isn’t guilty of that? After all, buying a cuppa in Starbucks is more convenient than making it yourself, right? But if you’re doing it all the time, you keep letting your hard-earned cash slip through your fingers, often without really noticing it. So, stop and have a think about how much you could save if you break that habit.
6. No monthly budget
One of the main reasons many of us tend to get into trouble with our financial management is that we don’t have a monthly budget. Without a budget, we don’t have a plan for our expenditure, which can lead to overspending. The result? Money disappears, and we turn to our credit cards to cover the difference. This just creates a chain reaction that only brings unpleasant results. It’s definitely a bad habit but fortunately it’s one that can be easily rectified.
7. Paying for too many subscriptions
At first glance, it doesn’t seem much to take from your budget. After all, streaming services usually only cost around ten bucks each. But if you have Netflix, Amazon Prime, Stan, Binge, Disney Plus, or whatever services you’re paying monthly, that’s a different story. It’s time to unsubscribe to those you don’t use regularly and keep only the ones you do.
8. Keeping up with others
Keeping up with the spending patterns of the people around you when you have less than they do is a recipe for disaster. Buying luxury cars, going on costly holidays or spending on expensive new clothes is fine – if you can afford them. But if you’re buying them so you can keep up appearances, then this is a bad habit that spells disaster for your finances. As a general rule of thumb – if you can’t afford it, don’t buy it.
It's time to change those bad financial habits
So, are you guilty of many of these financial bad habits? If so, it’s time to make some changes and restart with a clean slate. And if you’re going through some financial strife right now, we’re here to help. Just take a look at our cash loans from $500 - $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours – so you can consolidate your debts, pay off those credit cards and start rebuilding your finances.