3 Bad Money Habits to Kick
It’s easy to continue making the same money mistakes over and over again, especially if your bad money habits started as early as your 20s. Overspending, accruing debt, and never saving anything are three of the biggest problems when it comes to personal finance. Learn how to take control of your spending and ensure you never have a money problem you can’t handle.
Habit #1: Not Tracking Your Spending
No matter how diligently you follow a budget, it’s easy to get tripped up over a weekend. Your Saturday and Sunday expenditures may not show up in your bank account until Monday morning, which makes it difficult to keep track of exactly how much you’re spending. This often leads to overdrawn balances. Get in the habit of keeping a spending log to keep track of what you’re spending money on even during the weekend. There are plenty of apps that can help you easily track your income and expenses. No matter how fun you want your weekend to be, you definitely don’t want to be staring at a negative balance come Monday morning.
Habit #2: Not Planning Ahead for Large Expenses
When you have to make a big purchase, like a new car or a vacation, it’s tempting to just throw it all on a credit card. Even if you think you’ll be able to pay it off in full before long, there are a lot of things that can go wrong with your plan. If you even miss one payment, you could be hit with a serious fee or a crazy interest rate. Plus, you could screw up your credit score. Instead, budget regularly for big expenses, like annual vacations. If you know you have something coming up in the future, set up your bank account so part of your paycheck automatically goes into a savings account.
Habit #3: Never Setting Up an Emergency Fund
According to USA Today, one in five millennials have not yet started a savings account. Even those who have aren’t contributing to it regularly. Always keep money set aside for an emergency. You should always be able to handle your necessary expenses for six months if you were to lose your job tomorrow. If you get hit with any kind of unexpected expense, like a medical bill or an accident, you’ll still be able to pay your rent and utilities for the foreseeable future.
When you get into the habit of saving money, you’ll start thinking about your retirement savings, too. It’s never too early to start saving or investing for retirement. For more tips on investing, check out Hennion and Walsh’s Twitter.