Your finances are in limbo, you make enough money and do well to save whenever you can but you can’t seem to account for certain expenses. You may be engaging in some habits that are hurting you unknowingly. We will go through 7 habits that may be the cause of your financial downfall.
Spending money without tracking
The most common problem people have, is not keeping track of the money they spend. Trying to keep track of items in your head is not the best way. We often brush off miniscule items like, mobile phone credit/data, which often take a chunk of our money. You are much better off using a personal finance app that will do the tracking for you. If you don't know where your money is going, you're more likely to spend more than you earn, and that way leads to debt.
You buy items just because they are on sale
A sale, which is typically thought of as a budget-friendly word, can actually be extremely dangerous. The worst can be clothing sales, which lure buyers to pick up stuff they don’t need just because items are labeled as half off. To fight tempting sales, don’t approach sales as being good for your wallet unless something you need has been marked down.
Spending everything you earn
Everyone knows the feeling when pay day hits and you start making a check list of what you are going to buy. Even if you aren't exceeding your income, you still might be putting your financial future at risk. You should spend far less than you earn so that you can make saving a priority. Follow the old advice to "pay yourself first" and set money aside for the future and for a rainy day.
Buying the cheapest of everything
In the moment, this might seem like the smartest thing to do but when it comes down to it, you just might end up spending more than you thought you would. Instead, look at spending a little bit more on some items as an investment. But when it comes to a nice TV or laptop, it’ll pay to invest in quality. Take the time to ensure it’s a quality product, and then tell yourself it’s worth the extra money because you won’t be replacing it in the near future. It doesn’t need to be the most expensive product on the market, it just shouldn’t be the cheapest either.
Keeping up with the Joneses
Run your own race financially. It’s very easy to fall into the trap of trying to catch up with others financially. It is however important to understand your purchasing power and your priorities. By trying to “keep up with the Joneses” you could easily spend your way into debt and a poor financial future. Instead, figure out what matters to you most, stick to your priorities and stop spending on what's unimportant to you.
As we are about to end the year, these outlined habits can help you make some major changes to eliminate debt, save more, give more, and finally have a sense of peace and alignment about your personal finances.