There is no doubt that life gets more expensive each and every year as we change our spending habits.
For millennials in particular, this makes it harder to live the way they wish to live and enjoy a particular lifestyle.
Nevertheless, all millennials can enjoy a better and less expensive life if they begin by eliminating unnecessary expenses. Also, if they learn how to save just a little bit more each month.
More Than Just the Basics
Making a budget plan and sticking to it is something most people do. But this is not to say that it is easy to do this.
Fortunately, you have more resources available than ever before. Even if you’re currently not making that much money, you can still learn to budget what you do have. This is so your bills get paid and you save a little bit of money each and every month.
In addition, there are things that millennials can do to improve their finances, including breaking bad spending habits.
Let’s face it; we all have those. Even if you don’t realize it, you have habits that, if changed, can help your bank account to continuously grow.
Below are some of the spending habits that millennials should break if they want their finances to get much better.
1. Relying on Credit Cards
While having one credit card is a good idea, that card should be considered for emergencies only.
Many people rely on their credit cards for things other than emergencies. And it’s super easy to rely on it too much from that point on.
With most credit cards charging double-digit interest rates, you’ll be paying for that order of cheese fries for the next ten years if you’re not careful.
When shopping for a credit card, research them. Make sure that you get one with the lowest interest rate.
Keep it in a secured place so that you won’t be over-using it and getting yourself in trouble.
You can also choose a credit card with a low limit, say $300 or $500. This way, even if you max it out, the amount you’ll have to pay off won’t be that exorbitant.
If you can, try to live without credit cards at all. However, if you want to keep one for emergencies, make sure that’s the only time you use the card.
2. Not Sticking to Your Budget
If you make a budget and don’t stick to it, you might as well not make one at all. That being said, everyone goes over their budget every now and then. That’s nothing to be concerned about.
Still, if you consistently ignore your budget, you’ll never be able to stay on track financially. You should make your budget and then look at it at the beginning of every month. Prepare yourself for what you need to do.
If you find that you need to change the numbers at some point, that’s fine. But you should never ignore it altogether or just stick to pieces of it and ignore the rest.
And this brings us to another point. In the beginning, you have to make sure that your budget is realistic and workable. If you set goals too high — for instance, saying you’re going to put $500 in your savings every month.
Even though you know that’s impossible to do — you’ll only disappoint yourself. Be realistic with your budget. Or else you’ll end up taking out a loan or maxing out that credit card to pay your bills.
3. Not Preparing for an Emergency
Not preparing for an emergency is a great way to reduce the amount of money in your bank account. It also increases the odds of over-using your credit card.
When an emergency happens, it is always best to pay for it out of a cash fund. The only way to have the money is to save up for an emergency fund. Keep it in a separate location from the rest of your bank accounts.
Many financial experts recommend having an emergency fund that is equal to three to six months’ worth of living expenses.
However, if this is impossible for you, you should have some type of fund specially designated as emergency money. Even if it’s only a small amount of cash.
A separate account with emergency money in it is always beneficial and it can give you great peace of mind month after month, year after year.
4. Keeping up with the Trends
We’ve all heard the expression “keeping up with the Joneses” and this habit can drive you straight to the poorhouse.
If you insist on having the latest electronic gadgets, brand-name clothes and purses, and all of the other expensive things that seem to be the latest trend or fad, you’ll never have enough money to do the things you want to do, such as saving for retirement and creating an emergency account.
Keep in mind that you don’t have to have the “latest” of anything. Trying to do so is always a bad thing for your finances.
If you think that you’re going to have trouble sticking to this plan, you might want to just change your mindset. Once you change your mindset, you no longer feel that you need these things. It will be a lot easier to stop spending so much money just to keep up with other people.
Continue reading this article in our blog! Trust us when we tell you that, most of us will be guilty about the last 5 spending habits.
Click here to continue, to learn more about the habits you didn’t even notice you were doing.
Wrap Up: Spending Habits
Being in control of your finances is not that difficult.
The first step to good spending habits is taking a good look at them so you can figure out which habits you need to break in order to make things better for yourself.
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