Five Damaging Financial Habits and How to Fix Them
Getting buried in debt does not always come from major purchases, like a car or a house. More often, it comes from little, seemingly unimportant habits that builds up like a snowball rolling downhill every month.
This list takes a look at five common financial habits that can get you in the red.
1. Not paying attention to balances
2. Buying little things
The relatively small, inexpensive items that you think are insignificant surprisingly add up at the end of the month – a dinner out, entertainment, or coffee. Make it a habit to record all of your expenses. You can find some smart phone apps that can help you do this here.
3. Using high interest debt
Pay attention to loan and credit card rates, and always opt for the ones with the least interest. Take some time to compare interest rates even if it gets tedious.
4. Setting yourself up for failure
Instead of relying on self discipline every time you feel like splurging, set up an environment with safeguards to keep you away from temptation. Set up a separate savings account that is not accessible to you. If you tend to max out your credit cards, leave them at home. Get a buddy who can talk you out of unnecessary shopping.
The first step to get your finances straight is to acknowledge that there is a problem. Stop justifying wants as needs. Face the numbers and set a plan how to settle your debts instead of just paying the minimum amount each month.
You can read the full article from Investopedia here.