6 Bad Money Habits And How To Overcome Them

Spending More Than You Earn

If you spend as much as or more than you earn, living paycheck to paycheck with no long-term financial plan. This way of life makes it practically hard to save or accumulate large wealth over time. Even if your earnings aren’t much right now, spending every last dime is still considered a bad financial habit. Spending significantly more than you make on costs — or, even worse, spend more than you earn by leading a lavish lifestyle. Minimize your expenditure so that you can at least have some money on hand.

Relying On Loans To Pay Your Bills

This is connected to individuals who spend more money than they make. Living within your means is critical since failing to do so may force you to rely on loans to meet your bills. It must be irritating to have to borrow money every month to pay bills. To avoid this, you should significantly lower your monthly/weekly expenses, work strategically to improve your earnings or devise legal ways to boost your income.

Blaming others for your failures

So many people are still “playing it by ear it” when it comes to generating steady earnings, with one month being a hit and the next being a miss. Instead of living like this, where your monthly earnings is uncertain, get a job that pays you every month or start a business that pays you monthly. The amount you make in business may vary, but at least create something! The goal of every business is to generate money and profit, but if that isn’t occurring right now, you might consider leveraging your skills to find a job that pays consistently. After that, you can become a full-time entrepreneur.

Waiting till you “have/make more money” to save or invest

“If you don’t learn to give a little, you’ll never be able to give a lot,” they say, and it’s the same with saving and investing. Do not wait until you “have more” to begin saving and investing, as both will grow over time due to the power of compound interest.

Saving without a long term goal

Money that is maintained without a specific objective in mind is often wasted. If you want to conserve more of your savings, you must first establish a clear goal and then devise a strategy to attain it. Begin by identifying the primary goals you want to attain in the future, such as owning a home, purchasing a car, or paying for your children’s education. Next, estimate out how much money you’ll need to save and how long you’ll need to save it. Finally, to ensure consistency with your savings, set up a recurring automated transfer from your bank account to your savings/investment plans.

Constantly Dipping into your savings

If you continually draw from your savings, you won’t be able to expand your wealth. Your capacity to generate wealth will be affected if you lack the discipline to save. Once you’ve started saving for a certain goal, don’t touch it until you’ve reached it. You can set goals for 3, 6, 9, or 12 months or more to keep you on track. That way, you’ll be able to concentrate and do far more than you ever anticipated.

To reach your financial goals faster do these

• Create and stick to a budget
• Start and maintain an Emergency Fund
• Pay yourself first by saving a portion of your income every month or every week (save 20% of your earnings per month/week)
• Save to invest, do not save to spend
• Document your daily/weekly/monthly expenses so you can measure and tweak your money leaks
• Start and stick to your savings and investment plans

Overcoming bad habits and developing new ones is a process that takes time. You can begin to change and acquire healthier money habits that will lead to financial success with dedication and the knowledge obtained.

Want to begin your journey to financial freedom? Start here.