7 Self-Sabotaging Money Habits You Need To Stop Doing
Money: so hard to get, so easy to spend. Money patterns that make things a little tight before each pay day can be destructive over the long term – and you might not even know they’re habits you’ve formed.
Dailyworth recently looked into a few toxic money habits that have the tendency to drag your bank balance down. Here are some of the ways you could be inadvertently mishandling your money.
1 / 7
#1 Lending money
Lending money to someone in need is a noble thing, but lending money can also cause a few unnecessary headaches in the future. As much as we wish it were so, many of our friends aren’t like the Lannisters. You won’t always get that money back, and it can put a serious strain on your relationship in the process.
No one ever wants to come across as stingey, so there are two options:
–Try helping out in a non-monetary way. Guide your mate towards a good financial adviser; help them out with lifts if they’re without a car; cook them dinner if they’re in a bind; or send them some money hacks like these.
–If you’re intent on giving money, help ease stress by changing your perspective and consider it a gift. That way there won’t be resentment or awkwardness if they haven’t paid you back on time/ever.
2 / 7
#2 Always picking up the tab
Shouting your friends a round of drinks or an after-work gelato often makes you feel pretty good. What’s a $15 pitcher between friends, right? You’re often so high on the camaraderie of it all, that you might not be realising what it’s doing to your bank account.
If you’re struggling with your finances or even putting off a big important expense, ‘little’ purchases like these accumulate to big impingement on your budget. Sadly, if you make these splurges a regular occurrence, some might come to expect the same treatment in the future. Plus, having to ask yourself whether these friends are hanging out with you because they like you, or if it’s the free meal, is never fun.
3 / 7
#3 Emotional spending
You’ve had a rough day at work, we get it. You didn’t get that pay rise and the guy in the cubicle beside you wouldn’t quit being an absolute jerk. But will those $350 Adidas Yeezys really make you feel any better? Or downing two wines and an Aperol spritz at the nearest bar? Probably not.
There’s no denying that emotional spending (like emotional eating) is a pretty hard habit to break. But you’ve got to realise that making on-a-whim emotional purchases doesn’t provide viable solutions to the issues. And to be honest, it can often make things worse: the dent in your bank balance will last far longer than the temporary high of instant gratification.
Try your hardest to set some personal rules. If you feel an emotional purchase coming on (“Wine in a bra!? I need this!”) wait a day and reassess. Or only purchase items from a pre-prepared wish list that you compiled when you were emotionally sober. That way your purchases will actually be beneficial, and not something you’ll live to regret later.
4 / 7
#4 Depending on your credit card(s)
Speaking of spending, how great are credit cards? It’s like having an endless amount of money with no repercussions!*
One of the best money lessons we’ve learnt from TV is to only use credit cards if you know you can foot the bill. Never use a credit card if you don’t have the cash to repay it straight away. To avoid getting stuck in a cycle of credit card reliance, be sure to keep a ‘rainy day’ fund as a separate savings account, just in case.
Only spend what you have. You never know, you could be trashing your credit rating without even knowing it, and nobody wants that.
*there are definitely repercussions.
5 / 7
#5 Not keeping track of your finances
It’s a scary thing to realise you’re flushing your hard earned dollars down the drain, but it’s even worse when you ignore what’s happening.
If you’ve found yourself falling into debt, don’t bask in denial’s glow and assume things will work out or that you’ll deal with it later. Be proactive and stage an intervention on yourself: seek advice, start budgeting and try to accept reality.
6 / 7
#6 Spending everything that you earn
A large portion of our pay cheques go to the necessities, namely rent, food and bills. But what about the surplus? We know the right thing to do is pop it away in your savings account or invest it, but when you’re bombarded with cheap flights to Japan or a really cool new jacket at the corner thrift store it’s often hard to do the right thing.
But you’ve got to think long game. Without savings, there’s no cushion to help you out if something unexpected happens, or you forgot about your annual car registration again. The best decision is to start budgeting correctly: give yourself monthly allocations, set some goals and include a little reward every now and again when you reach them (it will incentivise you to keep going).
7 / 7
#7 Comparing your success to other people’s
This one’s a biggie. When you’re off moping about how your high school frenemy just bought her own home and all you have to your name is a push bike and a dying cactus, remember that measuring your success by what other people share online is insanity.
As Gretchen Cliburn, director of financial planning at BKD Wealth Advisors, puts it: big houses and expensive things only indicate how some people choose to spend, and not how much they actually have. For all you know, that frenemy might be in a pretty serious amount of debt and living well above her means.
To avoid this, Gretchen recommends you start by figuring out what is important to you and set some life goals for yourself. “Once you have identified what is most meaningful to you, make spending decisions based on that,” as opposed to overspending in order to chase a certain ideal of ‘success’.
The key understanding here is that everyone has different measures of success. While you might think someone’s pretty successful for buying their own home, they might be envious of your killer job or your close-knit group of friends. Success is subjective. And push bikes are still cool.
h/t Daily Worth
Rebecca Russo is a freelance writer and editor who (probably to her detriment) takes all her money advice from Abbi and Illana on ‘Broad City’. Find her online here.