In life nobody is a walking encyclopedia, i.e nobody knows it all, once in a while as humans we are susceptible to error, we all make mistakes in matters of life as well as finances.
If your goal is to save more, earn more, and be more in control of your finances , you should take some time reflecting on how you manage your money.
Here are some of the unhealthy money habits that we need to put to an halt in order to achieve our financial goals :
Stop These Seven Unhealthy Money Habits
1. Waiting Until You “Have more money to Invest”
When is the right time for you to invest?
A lot of us assume the right time is when they start earning six figures before they can invest.
We have said it over and over again, that the journey to financial freedom requires financial discipline. Even if you are earning $200 per month, if you want to invest you will.
The journey of a thousand miles start with a step, why can’t you take the first step today.
Heard about compound interest? Its magic works best the younger you are.
Investments can be in a form of stocks, shares, or property. If you’re nearing 30, you may want to consider investing towards your retirement, although other forms of investments are suitable too.
2. Spending All of Your Income
Some of us are used to spending on impulse, we don’t even have a budget, a plan of how our income should be spent, all what we do is just spend all the income you received in a particular month, without savings and you get back to zero level, meaning you eat from hand to mouth. You live from paycheck to paycheck.
Many people adopt the 20-10-50-20 rule when spending their paycheck: You pay yourself first by saving 20% of your salary, 10% goes to tithe or charity, 50% of your salary goes to your necessities, such as your housing and bills. 20% goes into your wants, such as dining and entertainment.
Of course, the more the better. If you can afford it, you can allocate more money on your savings than wants. But if you want to ensure your future, you should start saving NOW.
3. Having No Idea Where Your Money Is Going
Sometimes we often ask ourselves where did our money go or do we lost some money?
Many people struggle with managing their finances and keeping track of their expenses.
This is not a good habit. Before you even get your paycheck, make a plan of how you are going to spend it that is why you need a budget .
Also, keep track of your daily expenses. You can either write them down in a designated notebook or make use of an expense monitoring app.
This habit we keep you abreast of your finances, budgeting is a financial planning tool you need in your journey to financial freedom.
4. Going Without A Savings Goal
You cannot save just for saving sake you must have a specific goal or objective i.e the reason why you are saving. There is a saying “ if the purpose of a thing is not known, abuse is inevitable” You must always have a savings goal in mind when you are saving.
People who set a money savings goal save faster than those who don’t.
Whatever your purpose is – buy a new home, realize your dream vacation, or save money for your kid’s education, you’ve got to name it.
If you’re new to saving, try working on a small goal. Taking into account different factors such as your monthly income and expenses, work out how much you can save for each goal.
Try to achieve a balance between what you can afford and how long you want to save for.
5. Neglecting Your Bills
Nobody will pay your bills for you, the act of neglecting your bills for some times accumulates your debt which might hold you down on the journey of financial freedom.Paying your bills on time can be challenging but it is an essential skill to learn.
The first step is to get organized:
- Keep all your billing statements in one designated folder and be sure to keep track of when they should be paid. Be mindful of your due date to avoid interests.
- Choose a payment method that suits you.
- If possible, pay your bills or set a budget for them one month in advance. Early payments can mean discounts and less worry.
6. Relying On Your Children For Retirement
A lot of children are struggling financially, it is not easy for most of them to take full responsibility of taking care of their parents. The earlier the better it is for you, when planning for retirement.
Your retirement shouldn’t depend on other people, not even your kids. Remember that they will have their own family too and would have many expenses of their own.
In addition to saving money, you should contribute to your 401 (k). If your employer offers a traditional 401(k) plan, you can contribute a pre-tax money which can boost your savings over time.
7. Paying For Subscriptions You No Longer Use
Do you have a lot of subscriptions?
Recently I discovered I don’t really have time watching TV, and most news I can get from daily news platform on internet, I have to stop my DSTV subscription.
Whether it’s an antivirus software for your laptop, a fitness app, or a magazine, if you’re not using it anymore, make sure to cancel your subscription.
Most companies employ an auto-renewal program for subscriptions of their products. Check the user agreement to be sure!
In conclusion, Managing your finances can be very challenging, but by trying to stop this unhealthy money habits, you become more in control of your finances and achieve your financial goals.