Sign In/Sign UpTRENDING BASIC MONEY MANAGEMENT TIPS
TRENDING BASIC MONEY MANAGEMENT TIPS
08.26.2021 / Lifestyles « Back to all articles
5 Bad Money Habits That Are Normalized
Normalizing poor financial management has made people give themselves permission to skip some of the most important things they need to be doing. These bad habits can damage people’s financial health for years. Here are five of the worst spending and saving habits that are normalized.
1. Failing to Make a Budget
It is very typical for people to completely forgo the first step of budgeting: They do not make a budget. Instead of outlining their spending limits with itemized expenses, they have general approximations of what they need to spend on essentials every month. This leads to overspending and continuously buying things they want before paying for everything that they absolutely need.
2. Overspending Every Month
One of the most common ways that people accumulate credit card debt is by consistently spending more than they earn. A regular routine of overspending is a more common credit trap than falling into debt after hardship. People decide they will worry about the cost of things at a later date rather than delaying a purchase. Consequently, they end up paying a lot of credit card interest instead of making new purchases.
3. Not Having a Rainy Day Fund
A striking percentage of households have little or no savings. When they must cope with an unexpected expense or a sudden loss of income, it can throw them off track from their budget for months. It is imperative that people put a little money aside in a rainy day fund so they’ll be ready to handle the unexpected.
4. Forgetting About Retirement Savings
Ideally, everyone should start planning for their retirement as early as possible into their career. Unfortunately, many people do not begin saving for retirement until a decade or several decades after they start off on their career path. This could possibly prevent them from retiring comfortably at a reasonable age. When people work for employers who match part of their contribution to a retirement savings fund, they are effectively leaving money on the table if they do not begin saving as soon as they are able to.
5. Ignoring Credit Scores
Some people think they will not need a good credit score unless they want to buy a home. In reality, a good credit score is fundamental to good financial health. Without decent credit, people will be likely to pay higher interest rates on things such as credit cards and auto financing. Furthermore, they may effect their ability to qualify for key opportunities such as renting an apartment or even landing a job.
Identifying bad habits and correcting them can help everyone become more financially stable. A few small changes can make a big difference.
Credit Talk
08.26.2021 / Lifestyles « Back to all articles
5 Bad Money Habits That Are Normalized
Normalizing poor financial management has made people give themselves permission to skip some of the most important things they need to be doing. These bad habits can damage people’s financial health for years. Here are five of the worst spending and saving habits that are normalized.
1. Failing to Make a Budget
It is very typical for people to completely forgo the first step of budgeting: They do not make a budget. Instead of outlining their spending limits with itemized expenses, they have general approximations of what they need to spend on essentials every month. This leads to overspending and continuously buying things they want before paying for everything that they absolutely need.
2. Overspending Every Month
One of the most common ways that people accumulate credit card debt is by consistently spending more than they earn. A regular routine of overspending is a more common credit trap than falling into debt after hardship. People decide they will worry about the cost of things at a later date rather than delaying a purchase. Consequently, they end up paying a lot of credit card interest instead of making new purchases.
3. Not Having a Rainy Day Fund
A striking percentage of households have little or no savings. When they must cope with an unexpected expense or a sudden loss of income, it can throw them off track from their budget for months. It is imperative that people put a little money aside in a rainy day fund so they’ll be ready to handle the unexpected.
4. Forgetting About Retirement Savings
Ideally, everyone should start planning for their retirement as early as possible into their career. Unfortunately, many people do not begin saving for retirement until a decade or several decades after they start off on their career path. This could possibly prevent them from retiring comfortably at a reasonable age. When people work for employers who match part of their contribution to a retirement savings fund, they are effectively leaving money on the table if they do not begin saving as soon as they are able to.
5. Ignoring Credit Scores
Some people think they will not need a good credit score unless they want to buy a home. In reality, a good credit score is fundamental to good financial health. Without decent credit, people will be likely to pay higher interest rates on things such as credit cards and auto financing. Furthermore, they may effect their ability to qualify for key opportunities such as renting an apartment or even landing a job.
Identifying bad habits and correcting them can help everyone become more financially stable. A few small changes can make a big difference.
