Are you sick of making financial decisions that get you nowhere? If this is something that happens to you on a daily basis these bad decisions turn into habits. Therefore, even though learning how to make good financial decisions is important, it’s even more fundamental that you break all the bad financial habits that are hurting your bank account so bad. Still, this can be a pretty difficult thing to do when you don’t know which habits are hurting your finances the most. That said, we came up with a list of 5 bad financial habits you need to think about breaking right now.
Delaying saving for your retirement
No matter how old you are, saving for retirement is always a good idea. However, something that so many of us tend to do is delay putting money in our savings accounts until we’re close to retirement. But think of it this way, the earlier you start the easier it’ll be for you to create your retirement fund. Moreover, if you start saving for your retirement early, you’ll need to make smaller contributions and your retirement fund will be less of a financial burden. You can start by calculating how much money you’ll need once it’s time for you to retire and figure out how much contribution you need to make on a monthly basis.
Using credit cards too often
Using credit cards is not necessarily a bad thing but if you lose control over your spending, credit cards can become a powerful enemy of yours. One of the biggest problems with credit cards is that they take away the sense of actually spending money. And there’s no need to say that this can hurt your financial situation on an entirely different level. Therefore, the next time you go shopping, think about leaving your credit cards at home and using cash instead. If you believe you can stay in control of how much you spend even when using credit cards, make sure you limit yourself to carrying no more than two of these. Of course, paying off any credit card debt you might have is an absolute must.
Mixing personal and business money
If you’re running your own business, there will be times when you’ll find yourself tempted to mix your personal and business finances. Still, this is definitely something you should avoid, not only because it can hurt your personal finances significantly but also because it can blur your image of how well your business is doing. Therefore, it’s recommended that you open a business bank account and use it only for storing your company’s money while keeping your personal finances separate. If your business starts running low on cash, turning to a company that gives bad credit business loans is a much better idea than dipping into your own money.
Not saving for an emergency
Saving for your retirement is one thing but it’s also extremely important that you start saving for emergency as early as possible. You might be doing all right financially, but you never know when you’re going to need to pay for expensive medical bills or car repair. Unfortunately, expenses like this usually come unexpected and leave you with no time to save as much money as you need. Figure out how much money you can put into your emergency saving every month and start doing so as soon as possible. Just bear in mind that people miscalculate how much money they need in their emergency fund. In order to avoid this, building in a bit of a buffer is recommended.
Paying your bills late
Paying your bills is something you simply have to do no matter what. However, paying your bills late sometimes sounds like a good idea since it leaves you with more money to work with until you get your next paycheck. It indeed is a bad habit to have but it’s something that can happen to any of us. Paying your bills late means your credit score is taking a hit which can turn out to be a real burden in the future. In order to break this habit, you might need to calculate how much money you need to pay your bills and make sure you have enough to pay your bills as soon as it’s time to do so. That way, you’ll be way less likely to spend that money on something else.
All of these bad financial habits may be tough to break but doing so is extremely important for your financial well-being. Start eliminating them one by one and soon you’ll find yourself in a perfect financial position. However, don’t forget that habits like this tend to come back and make sure this doesn’t happen to you. If you can accomplish all of this, you’ll be in a great place.