They say it takes 30 days to make or break a habit and for most people, good habits require more work to maintain than bad ones. However, fostering bad habits can keep you from your ultimate goals of happiness and success.
When it comes to breaking bad habits, many people identify quickly with health ones…the need to quit smoking, eating junk food, or exercise more. However, a lot of people overlook bad money habits that may be paving the road to financial trouble.
In the vein of getting back on track and exchanging bad habits with good ones, here are four bad money habits you should work on overcoming;
1. Paying everything with your credit card. Unless you actually are planning on paying off the balance every month, this can cause you to get into a serious hole. Tracking all your swipes will help you see where all your money goes, and yes, you may grab some reward points, however, the interest can pull away extra money that can fund more important goals. Instead, set a max dollar amount that you can use your credit cards for each week or month. Ensure you have the funds to pay it off from your bank account without pulling from other savings plans each month, and you will actually help your credit score and bottom line in the long run.
2. Paying the minimum on your consumer debt. It may be great to pay your bills on time each month; however, only paying the minimum balance takes longer to actually clear the debt due to the interest rates. Find the highest interest rate balance, and throw any and all extra money toward that payment each month. Instead, work on clearing out the debt with the highest interest rate first. From there, target the next highest one and so on.
3. No setting aside money for emergencies and retirement. If you don’t have an emergency fund set up, now is the time to start. No one likes to plan for the unforeseen, however, when it strikes, whether it be a medical bill or car repair, it can wreak havoc on your financial life. In addition, though retirement seems way off, the sooner you start saving, the easier it is to reach your target. Even in this day and age, having a retirement savings account isn’t a 100% safeguard for money issues in the future. But, better to have something than nothing.
4. Ignoring your employee benefits. Be honest, have your ever read your employee benefits booklet? Granted, they aren’t the most fascinating reads, but, they’re full of useful information to help you lead a more financially savvy life. Provisions for life insurance, health insurance options, employee stock purchase programs and flexible spending accounts, which allow employees to set aside pre-tax money for health-care expenses, are worth considering. Also, if your employer offers a 401(k) match, make sure you contribute at least enough to take advantage of the full match – it’s free money.
If you find yourself guilty of these bad habits, break them before your financial health suffers. Start small, choose one thing at a time to tackle, and celebrate wins along the way. William Wolske, CPA wants to be sure you are making good money decisions. Need help with your family monthly budget? Or saving for your retirement or next vacation? Make an appointment with William Wolske, CPA. He can assist you in your money saving goals and show you ways to invest. Contact our offices at 843-706-9644 and schedule a free consultation. We’ll go through your financial situation together and have your peace of mind waiting on the other end.