7 bad money habits and how to break them

7 bad money habits and how to break them

Are you facing shortagre of money in your life and wanted to save money and become finacially free? Then keep reading this article till the end where we will discuss 7 bad money habits and how to break them.

7 bad money habits and how to break them.

We all know how important is money in our life. Saving money is as important as getting money. As we grow in our career or business we focus on getting more money instead of saving it. It does not mean that you need only save money instead of spending it. Here we will discuss 7 bad money habits and how to break them.

Our habits sometimes play an important role in our saving pattern. You may have some good and bad habits in terms of money and finance.

If you already know the bad habits and then it’s well and good and you need to quit it.

But if you do not know about your habit which is bad then it could be dangerous.

But you need not worry. We will discuss the 7 most important bad habits you may have in your life and how to break them as soon as possible.

1. Spending more than you earn

Sometimes we spend more and fall into the trap of impulse buying. This we all experienced in past.

You might have visited a shopping mall and saw some expensive watches and sale items which is higher cost.

You might have purchased it with your credit card for later payment of convert it to EMI.

Sometimes we purchase some extra clothes which do not require. Many times we purchase bulk items from the supermarket because it is available with a discounted cost.

Buying discounted items in bulk from the supermarket is a good thing if you have enough money. But if you want to save money from your income you need to avoid bulk buying.

So do not spend more than you earn. Always keep in mind of your earning and spend accordingly.

How to break them?

  • Instead of using your credit card buy with your debit card or cash.
  • Just think once whether it’s really necessary to buy it immediately or you can postpone it for at least 30 days.
  • Think once before making big purchases.
  • You can always check the cost of things online before buying them in a shop or a mall.

2. Relying on Credit card to pay the bills

If you depend on the credit card to pay the bill for this month then you need to think about it once. Paying bills on a credit card will lead you to a bad habit of dependency.

Don’t pay your bills on a credit card if the bills exceed your income for the month. Some people pay the bills of one credit card by using another credit card which is again something that you should avoid.

How to break them?

  • Reduce your bill by changing the subscriptions.
  • Do not pay one credit card bill by using another credit card.
  • Avoid spending on credit cards for one to three months and keep saving these amounts on your bank account. Next time when you need to pay the bills you can pay them easily.

3. No Emergency planning

What if, you face an accident, job loss, natural calamity, or war-like situations?  Your emergency financial planning will keep you safe. Most people do not emphasize emergency money planning.

How to calculate the emergency fund?

  • If your monthly expenses are $2000 including all your EMI, Rents, Insurance, Bills, Fees, etc. then your emergency fund should be more than $6000.
  • Generally, experts advise keeping the emergency fund around 3 to 6 months.
  • To save $6000 you need to start a SIP of $600 for 10 months or any amount you are comfortable with to achieve the goal as soon as possible.

Related read: How to Build an Emergency Fund

After saving the emergency fund, keep the money easily accessible to you or your family member.

In a recent reply to a Twitter user, Dave Ramsey replies, “You should never put your emergency fund in something that can go down in value. You should never put your emergency fund as something that charges you a penalty for taking it out early, like a CD. Your emergency fund is not an investment. It’s insurance. Insurance costs you money to protect your investments. That’s what insurance does.

4. Paying the bills late

This is another common bad habit some people have. They pay late because they forget their date of payment, negligence, or lack of money. This leads to a bad credit score.

Sometimes you need to pay the fine for not paying the bills on time.

How to break this?

  • To break this, you need to keep yourself updated about the notification.
  • Save the date of payment as a reminder on your mobile or laptop.
  • Do not use more than 2 credit cards. It may be difficult for you to remember the date of payment.

5. Unnecessary cable and internet connection

You may have an unnecessary cable TV connection with a higher subscription rate for more channels you usually do not see.

You may also have a subscription to Amazon Prime or Netflix or any OTT platform which you do not use often.  This costs you more money and it’s again a bad habit.

How to break this?

  • You need to review all your subscription of TV, Internet, Club membership, GYM membership, etc.
  • Keep only the memberships that you use mostly and cut the rest. You can reduce the Cable TV plans and Internet plans if you do not use them fully.
  • Instead of TV, you can watch YouTube or an online version for the content platform which is available at a much lesser cost.

Must Read: 7 best ways how to save money from monthly salary

6. Informal Impulse Buying

As we discussed earlier some time due to the online sale, while visiting a mall or supermarket we buy something which is not required at that moment. You need to keep yourself away from such impulse buying.

How to break this?

  • Try to post pine it at least 30days if you can

7. Eating out instead of Cooking

Now some people may argue that they do not have much time to make food inside. So they need to eat outside. But eating outside has several bad effects on your body as well as your finance.

It not only costs you more but also sometimes it’s unhealthy.

Eating outside is the same thing as ordering food forming online apps and food delivery shops? This cost you extra delivery cost

How to break this?

  • Instead of ordering food outside you can cook it in your home.
  • You can keep some fruits for snacks instead of eating junk food
  • If you are a office going person and bachelor you can share food making with your friends of roommate.

Final words

Earning money is difficult but saving money is simple. You need to break these bad habits to save more money and become financially independent. So these are the 7 bad money habits and how to break them.

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