When a practice becomes a habit, it becomes very difficult to give up. And if you have a bad habit that is money-related, it can be much more difficult to break.
A bad money habit can destroy your personal finance efforts and also prevent you from reaching your financial goals.
So, if you have any of these five money habits listed below, you seriously need to work on spending habits before it breaks you down financially.
Spending more than you can afford is one of the biggest financial blunders you can do to yourself. This habit exposes you to debt every time because you’ll have to rely on credit to make up for other things you need after lavishing your income.
2. Not having any plan for emergency
Nobody likes to be caught off guard when an emergency happens. This is why one of your saving plans should cover an emergency.
Emergency saving is a fantastic backup plan that prevents you from plunging yourself into debt or selling your properties due to unexpected financial issues such as long-term illness and job loss.
3. Not saving at all
You would probably have heard people saying ''why save for the future instead of living for now?'' If you are working toward a reasonable financial independence, your saving should start now.
Saving for the future is one of the best financial decisions anyone can take and this does not mean you should perpetually deny yourself basic life enjoyment because you want to save for the raining days.
4. Impulse buying
This has been identified as one of the habits that lead people to a series of dangerous spending behaviours such as unplanned and poor purchasing decision.
If what you buy is dictated by impulse, you may not take you through month end, let alone savings. You need to stop this to improve your spending and saving habits.
5. Failing to invest
Do you just make money, spend it and make another one without investing in anything? How do you think the rich get richer? It is because they invest their money in some profitable businesses. But if you are afraid of investing because you think you might lose it all, you will only keep making money and spending it and guess what, your money will never grow. You just have to invest to see your money grow.