Do you ever get paid on Friday, live throughout the weekend, then by Monday morning you look into your bank account and go “Where’s the rest of my money?” “What did I even spend it all on?” Embarrassed to say, I have once or twice -and I know I’m not the only one.
In most of our everyday life, we live in habits. From the time we wake up, brush our teeth, go get coffee, work, sleep, etc, it’s almost all habits. Lot’s of us like to take control of our habits; create good ones and eliminate the bad ones. Good habits help you become the person you’ve only dreamed to become. Lot’s of bad habits however, only brings you down and doesn’t help the progress of accomplishing your goals in life. Which ones cost you money though?
Not Having An Emergency Fund
According to Gobankingrates survey, 35% of Americans don’t have a savings account of $1,000 or more. Even more alarming is 34% how 0 savings at all.
Building an emergency fund sounds like a daunting task. In reality, an emergency fund will get you out of unexpected events such as a robbery, an emergency room visit, a car accident, etc… It’s best to start with a goal of at least $500 as an emergency fund.
To keep it simple, enroll in auto-pay at your personal bank or develop the habit to manually take 10% of you check to directly build your first emergency fund.
When starting to build an emergency fund, pay yourself first. Take that money and put it away for the future you. You never know when you might need it.
Using Credit Incorrectly
Many people fall victim to this, especially when you have just been approved of your first credit card. Suddenly, it just feels like anything in the world is at your fingertips. New game system? Buy! New outfits? Buy! New phone? Buy! It seems so easy at first but when it comes to pay the balance plus interest, you feel scammed.
In reality, using credit cards isn’t all that hard to master. It takes a little bit of time and discipline to learn how to use the card correctly. A good way to start off diving into the world of credit is to get a secured credit card. Learning how to handle your credit card responsibly is one of many keys to advancing yourself financially.
Impulse Buying
As we covered in my last blog post Stop The Impulse Purchases, impulse purchases can be a hard habit to shake off. Getting caught into their effective copy and persuasive salesmen is how stores bank on you.
Often mitigating impulse purchases will keep money in your pocket and will stop you from buying that yacht you’ve never wanted until today.
Not Budgeting
Following a good budget alone won’t make you wealthy, but it sure will get you pretty damn close. In a basic budget you should include:
- Food
- Bills
- Transportation
- Fun
- Savings
- Misc…
When you’re following a budget, make sure you stick to it. Creating a budget and having the discipline to stick to it is a different thing. On book I definitely recommend is The Everything Budgeting Book by Tere Stouffer.
Having Too Much Of A Consumer Mentality
A consumer mentality is exactly as it sounds. Technically everyone is a consumer, but constantly shopping to fill a void of boredom will not solve any of your personal finance goals. Many of us like to keep up with the Joneses, buy the latest and greatest Iphone. Pre-ordering the new Tesla. Ultimately, “Investing” into the wrong trends will be counter productive to accomplishing your financial goals.
Signing Up For Unnecessary Subscriptions
This one you’ll have to konmari your subscriptions library and ask yourself, “Does this truly benefit me everyday,” or “ Can I live without Netflix if I already have Hulu?”
According to another survey from Gobankingrates, the average American waste $348 per year (around $30 per month) on subscriptions they aren’t currently using. The terrorizing part of the survey is that the respondents were asked questions based on entertainment subscriptions. What they didn’t ask about were the unused gym, magazine, and commerce subscriptions that cost people hundreds of dollars a year.