The Toxic Financial Habits that are Hurting Your Bank Account
Sometimes we think we’re doing the right thing with our money, but some financial habits may actually be doing more harm than good. Here are some common toxic financial habits that you should resolve to break immediately if you want to get your finances on track.
You have bad spending habits. Maybe these bad spending habits are tougher to kick than you thought. Maybe you were on the right track and had a sudden setback. Habits are not easy to break, but you’ll need to find a way to do it if you don’t want your bank account to. After all, you need money to live. Try to cut back slowly when you’re trying to change or break a habit. Don’t jump in, cutting yourself off from whatever it is you feel the need to spend your money on. No one is capable of gaining control of their finances overnight.
You pay as you go without question. Stop right here! Though it is pivotal to pay your bills on time each month to avoid racking up debt, you could be hurting your bank account. Are you reviewing your outgoing payments to find which expenses can be cut? Do you have a budget? Have you squirreled any money away in a savings account? Take a look at your statements and determine where money is being misspent.
Buying what’s “in” right now. Do all the “cool kids” have it? This may have been an appropriate question to ask in high school, but it’s not fitting for adults who need to responsibly manage their money in order to navigate the world. What is “it”? A new gadget? Maybe expensive sneakers? Just because everyone else has it doesn’t mean you need it too. It doesn’t even mean they need it – if you can still properly function without the new trend or craze, then you’ll be just fine without it. Consider the things you’re giving up so you can get the newest thing. That’s opportunity cost – it could be a month’s utility bills, a fraction of a down payment on a new vehicle, or even just the progress in reaching your savings goals or paying off debt.
You’re an emotional spender. Are you despondent? Are you vexed? Are you in a celebratory mood? Are you having a great day and just want to swipe your card? Emotional spending is a toxic financial habit that can affect your bank account significantly. If you manage your money poorly, chances are you aren’t going to feel much better. If you’re exacerbating an already difficult emotional state with financial stress, this could affect your bank account and your health.
If you are struggling with debt please contact our office for a free consultation. We’re here to help.