It’s time for a quick quiz, folks. The end of the month is here, and Christmas is just around the corner. If you celebrate this holiday, you know very well just how expensive it can be! As such, there is no better time than now to take a quick look at your spending habits and see if you have a bad one or two that you have to get rid off.
Oftentimes, it takes an outsider to point out these bad habits. Even when it comes to personal finance matters – maybe especially when it comes to these matters – we sometimes need a quick reality check to put things back in balance. Read on to find out more about life tips that will help you pinpoint your bad spending habits, if you have them.
Bad Habit #1: Spending more than you earn.
It is very easy to have this habit and not really realize it. I think that people who have this bad habit fall into two categories:
- Those who are fully aware and do not care. They just want to live the way they do, debt be darned!
- Those who do not keep tabs on their income and their expenses until they realize that they are in so much debt.
Whether you fall under the first or the second group, it does not matter! It is about time that you pay more attention to the money that comes in and the money that goes out! This is the only way that you can achieve a stable financial situation in the long run.
How to do this? It’s simple. Take a seat and a sheet of paper. List down all the money that you receive on a regular basis – monthly, perhaps. Then list down all your regular expenses in the same period. Total the numbers, and compare the two total amounts. Now you have an idea of how much you are earning in total and how much you are spending.
Bad Habit #2: Using your credit card as if it were actual cash in your hands.
Face it: your credit card is NOT cash. It is money that you DO NOT have. Do not fool yourself into thinking otherwise. A lot of people find themselves struggling with an oversized credit card bill simply because of this way of thinking. This habit will only lead to personal finance difficulties, trust me. Learn to see your credit card for what it is, and be better off for it!
Bad Habit #3: Borrowing money to pay off debt, and then going through the whole cycle again and again.
There are definitely instances wherein borrowing money to pay off a certain kind of debt, can be helpful, but this is not the norm. If anything, it is an exception.
The problem lies in the fact that it tends to become a habit. You do it one time, and before you realize it, you are always borrowing money to pay off one debt or another. Do not let this become a habit. You do not want to be paying off debts for the rest of your life, do you?
Bad Habit #4: Using your credit card when you have cash in your wallet.
Or in your bank account. No matter what you do, do not use that credit card if you do not have to. You may reason that it is more convenient, etc. However, it is very easy to “forget” to pay off the balance in full. Remember that you are spending more when you use your credit card due to interest rates and other applicable fees. Why would you want to pay more when you have the cash just sitting there anyway?
So, do you have any of these bad spending habits? Do you want your personal finance situation to improve? Chuck these habits out of the window!
Photo via Mshades