1. You Ignore Your Bank Account
Most people directly deposit their paychecks into their bank account and use a debit card for most of their spending. They may implement automatic withdrawals for mandatory expenses, like rent or a car payment.
Even if you ensure you’re regularly covering your must-haves through automatic payments, you’re still at a disadvantage if you don’t regularly review your banking activity. It’s easy to lose track of your spending if you use a card to pay for small expenses, like a drive-through meal at Panera or a quick stop at the grocery store.
Instead of leaving things to chance, regularly review your bank account to see where you’re spending your money. You’re overspending if you find yourself short a few days before payday.
2. You Have Lots of High-Interest Credit Cards
Credit cards: most of us have them, but do we need them? It depends on what you’re using the credit card for. If you use your credit card as a crutch whenever you run out of money, you have a bad financial habit. Double-penalty if the credit card has an interest rate greater than 0% and you make minimum payments.
If you’re cycling between multiple credit cards with high-interest rates, you’re wasting your hard-earned money on fees to a bank. You need help, stat. Start a plan to pay down your credit cards and become more financially independent.
3. You Can’t Name All The Subscriptions You Have
Other services are essentially clones of other services, like Spotify and Apple Music or Netflix and Hulu.
If you can’t accurately name all the subscriptions you’re currently paying for or don’t use them frequently enough to warrant subscribing, it’s time to make some adjustments. Look at your bank account and credit card statements to see where you’re paying for subscriptions.
If you’ve got a few subscriptions you don’t need anymore, cancel them. You may be surprised at how much you save.
4. You Don’t Cook At Home
Are you constantly on the go, grabbing food at the local fast food spots, or meeting friends for a last-minute restaurant dinner? Not only is eating out regularly potentially bad for your physical health, but it also hurts you financially.
5. You Smoke Cigarettes (Or Vape)
Rather than continuing down an unhealthy path, try giving up smoking altogether. You can use the money you formerly spent on cigarettes toward paying off debt or saving for a down payment on a home. You’ll also be less susceptible to respiratory illnesses and diseases like lung cancer or emphysema.
6. You Have A Car Loan
While purchasing a new car comes with some benefits, like an extended warranty, less chance of mechanical failure, and enhanced safety features, you should keep the amount you finance to an absolute minimum.
Instead of financing a new car, look at the used options in your price range. Consider using a portion of your savings to purchase a used vehicle. That way, you’ll avoid a monthly car payment and keep your debt to a minimum.
You’ll save money on auto insurance if you own your car free and clear. While you may face some car repair bills, you can minimize your out-of-cost expenses by keeping up with the regular maintenance on your vehicle.
7. You Use Online Shopping for Stress Relief
We get it; online shopping is quick and convenient. There’s no need to visit a store; you just navigate to your favorite website and make a few quick purchases. However, the more you shop online, the more likely you are to get lots of promotional emails meant to attract your attention and get you to buy more.
Rather than falling prey to regular online shopping, keep your purchases to a minimum. If you’re looking for new clothes, visit your local stores and try things on. Purchase electronics after doing lots of research in stores and on review websites.
If Amazon is your best friend, maybe it’s time to find some new, less expensive friends.
8. You Aren’t Saving for Retirement
Pretty much every standard employment benefits package offers some option for saving part of your paycheck in a retirement account. You likely have your choice of a 401(k), a SIMPLE IRA, a 403(b), or something similar. If you’re self-employed or work part-time, you may need to set up a retirement account yourself.
Ideally, you should save at least the amount your company matches toward your retirement plan (or even more). For instance, if your company offers a 3% match on your 401(k) plan, save the full 3%.
If you don’t have access to a company-sponsored retirement plan, consider opening an IRA.
9. You Don’t Have Health Insurance
Most employers offer health insurance to their employees. However, if you work part-time or as a contractor, you may not have access to employer-sponsored group health plans. You can still get health insurance through other means, like the Health Insurance Marketplace.
With the wide variety of options available, there is little reason not to have health insurance. If you go without it, you may face catastrophic medical bills if you develop severe disease or illness.
10. You Have No Savings
Ideally, you should save three to six months of income for emergency expenses. That means someone earning $10,000 each month should have $30,000 to $60,000 in their savings account to cover unexpected costs.
Get Your Financial Bad Habits Back on Track
If you see some of these bad financial habits in yourself, it’s time to reassess your life and figure out how to get on the right track again. Start slowly by breaking one bad habit at a time. As you see the positive impacts, you can work on the next one.
Don’t get too down on yourself if the process takes time. Some of these bad financial habits are difficult to break, especially if you have little disposable income. Make an effort to improve how you spend your money, and you’ll reap the future benefits.