There are so many ways you can sink your financial ship. Quit these 10 bad habits to get back on course.
1. Spending Too Much Money on Lunch and Coffee
Two-thirds of American workers buy lunch instead of bringing one to work, according to a Workonomix survey for Accounting Principals. This bad financial habit costs the average person $2,000 a year. If that same person is also hitting their favorite coffee drive-thru once a day, they are shelling out an additional $1,000 a year. If you start work at 22 and work until you are 62, then you’ve flushed $120,000 down the toilet, and that doesn’t include inflation. Pack your lunch and make your own coffee.
2. Neglecting Your Retirement Account
Nearly one-third of all Americans do not have more than $1,000 in retirement savings, and over half have less than $25,000 set aside, according to the 2015 Retirement Confidence Survey. Unless you plan on working until the day you die, which you might have to do if you don’t plan accordingly, then you need to take care of your retirement account.
3. Robbing Your Retirement Account
Once you’ve established your retirement account, leave the money in the account. The money is for retirement, not so you can put a down payment on a new Lexus. Not only will you not have that money when you need it the most, you will also incur a tax penalty for pulling it our early.
4. Paying Late Fees
With access to direct deposit and mobile bill pay, there isn’t any reason to pay late fees. It’s a waste of money. So, just stop it now. That money would better serve you in your retirement account.
5. Impulse Buying
This horrible habit will break you in the long run. Research your purchases before making them. You will probably buy less and you will certainly find better deals on the items you do purchase. If you can’t stop making impulse purchase, then you might have an addiction that requires professional help.
6. Neglecting to Monitor Your Credit
Nearly 18 million Americans fall victim to identity theft a year, the Bureau of Justice Statistics reports. It can ruin a person financially and cause headaches for years. Stay on top of this by using an identity monitoring service like LifeLock. Services like this not only watch your credit and identity, but give you reports that can help you plan financially.
7. Using Credit Cards as “Plan B”
Credit cards should never be your emergency go-to plan. Paying for your emergencies with credit cards will cause you to incur debt and tons of interest. Put aside money for emergencies in a savings account.
8. Getting Loans for Everything
Payday loans and using credit cards for everyday purchases will be your downfall. It’s a loop that is hard to escape. If this is you, then you need to seek financial counseling to evaluate your situation. The National Foundation for Credit Counseling is a good place to start.
We live in a society that worships at the altar of consumerism, and many people judge their worth by the brand of purses/cars/shoes/clothes they own. Buy what you can afford, or it will catch up to you.
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Yeah, you pretty much nailed this one on the head. I am trying to change my habits of going out to lunch during work. If I made my own stuff from home, I would save so much more money! #5 is me to a tee. I am always going to the store hungry and buying everything in sight haha. I do the same with electronics. This is such a tough habit to break! Thank you for the post.