- Date : 08/08/2019
- Read: 4 mins
Do you find yourself in a financial mess every month? Here's how you can break those bad money habits.
No one likes to struggle with finances every month where you always land up borrowing money. If you regularly find yourself in such a situation, there might be a few things you are doing wrong. Whether it is subconsciously spending too much or indulging in something you cannot afford, it is time to correct your bad money habits right away.
Here are six bad money habits you need to stop now:
1. Depending too much on plastic money
Debit and credit cards give you all the freedom to buy what you want and when you want. However, they come with a dark side. It is very easy to get carried away and splurge. It also becomes challenging to track expenditure. Spending Rs 500 here and there may not seem too much, but it can add up quickly. A hefty credit card bill of Rs 18,000-20,000 can put you off track, eventually landing you in a financial mess. Missing out on paying your credit card bills will result in huge interest charges too.
Try giving prepaid wallets a try as almost all stores today accept wallet payments. It will help limit your spends as well as track the same. Alternatively, use finance tracking apps to keep plastic money expenditure in check.
2. Impulse shopping
We all love to shop, but indulging every time will leave you struggling for money every month. Ask yourself if you really need seven pairs of jeans? Something at 50% off may sound like a great deal, but you are still paying 50% for something you don’t need.
Every time the impulse to shop gets too strong, take a step back and put off the purchase for 24 hours. Almost 80% of the time, you will realise you do not want it after a day.
3. Spending more than you earn
There is no way that spending more than the income will have a happy ending. If you are spending more than you earn, you will get trapped in the vicious cycle of debt. That means you will have to borrow money every month or rely more on credit cards. The deeper you get into it, the possibility of coming out gets thinner.
Learn to live within your means. Budget for rent, groceries, utility bills, entertainment, savings, emergency fund, etc. and stick to it no matter what. Alternatively, you can also start a side gig to fund your lifestyle.
4. Not having an emergency fund
Life is unpredictable. You never know what may happen when. If an emergency strikes, it can completely wash out your bank account. This could be something as simple as the refrigerator breaking down or a serious issue like meeting with an accident.
Create an emergency fund by putting aside at least 10% of your income. It will ensure you don’t have to ask for financial help and can be self-sustained.
5. Hoarding money
This is one bad money habit that doesn’t get talked about enough. While a vast majority of people find it difficult to save money because of overspending, there is also a small percentage of people who are too afraid to spend. Being extremely cautious about how much you spend will also not bid well for yourself, and your family.
Loosen up and live a little. If you are working hard to earn, it is important to spend on yourself and do what makes you happy. Join a dance class, take a holiday – enjoy life!
6. Not taking control of your money
Not staying on top of your money is a short cut to the financial mess. Not tracking your money or not investing and planning for the future will mean you never elevate yourself to live a better life or provide the best you can for your family.
Learn the basics of prudent investing. Depending on where you are in life, invest so you can travel the world, educate your children better or plan for a comfortable retirement.
Take a look at where most women spend their money to identify what you are doing wrong and try your best to correct it. If there is someone in your life who you feel is financially prudent, seek help.