In today’s climate, we need our money to work for us more than ever. Between the rising gas prices and record inflation, people are struggling more than ever financially. It’s times such as these that we need to have good money habits. However difficult they may be to keep.
Luckily for us, there are a few ways we can lighten our burden. Unfortunately, it will come at a cost of its own. You see to have the money for things we need, we will need to give up some of our biggest wants.
Here are 7 bad money habits to drop to be more financially stable.
Stop eating out so often
We all enjoy dining out. It’s convenient, fun, and a seemingly great way to pass our time. The problem is that all too many of us spend copious amounts of money on it every year. In fact, it has gotten so significant that recent trends have shown that people spend more on eating out than they do on groceries.
This wouldn’t be quite as big of an issue if it were a better financial decision. But unfortunately, that isn’t the case. In fact, eating out is far more expensive than home-cooked meals. A study by Forbes shown that ordering a meal for delivery from a restaurant can cost nearly 5x the cost of what it would if the meal were homemade.
One of the biggest appeals of eating out can be convenience. Why cook yourself when you could have the food prepared for you? Unfortunately, the benefit comes with a hefty fine that takes a lot of money out of our pockets that could be put to better use.
7 Steps to Stop Eating Out So Much and Save Money (developgoodhabits.com)
Here’s How Much Money You Save By Cooking At Home (forbes.com)
Not setting a budget
A budget can be a smart way to limit your expenses. After all, it’s easier to overspend if you don’t keep track of the costs. Unfortunately, a potential turn-off from creating a budget may simply be the name itself. People often will have a negative connotation about budgets. They think of them as restrictive and something that guides us to only make purchases that we deem as necessities. This shouldn’t be the case.
We shouldn’t look at budgets as something that prevents us from buying the things we want. We should look at them as a way to CONTINUE doing that. Proper budgeting can take us from financial ruins to prosperity. All it takes is a bit of effort.
A popular budgeting rule that people like to follow is the 50/30/20 rule. In it you allocate:
50% of your income to needs.
30% of your income to wants
20% of your income to savings or repaying debt.
https://www.nerdwallet.com/article/finance/how-to-budget
Retail therapy is a bad money habit
Sometimes when things are not going well people will cope by making purchases. Either online or in person. This is known as retail therapy.
It may not be the most practical way to make us feel better, but it works. Albeit temporarily. A problem arises however whenever this is taken to the extreme.
Compulsive shopping can be a problem for a lot of people and it is important to get help if you are struggling with it.
If you want to make a purchase, make sure to fit it into the 30% that you spend on things you want. If you have already reached your limit, come back next month and get the product then. That way you won’t be exceeding your monthly limit.
Retail Therapy: Is It Really That Bad? (healthline.com)
Keeping up with the Joneses
Sometimes we can become envious of what others have.
Maybe it’s the neighbor’s new SUV. Or maybe it’s the new home your friend just bought.
Regardless of what it may be, it’s never a good idea to let our envy drive us to make purchases we shouldn’t. Just because they bought something nice and luxurious doesn’t mean you should too.
You should be happy for them and move on. Otherwise, you risk making a poor financial decision.
Remember, you can’t see behind the scenes. Just because someone may have a big house and expensive vehicles doesn’t mean that they can afford them. They may be in serious debt.
Stop buying things on sale
People often seem to glance over the fact that sales cost us money too. Sure the product is at a reduced rate, but sometimes it is worth it to just not buy the item at all.
Bear in mind I am not talking about all sales. I am talking about buying unnecessary items.
For instance, if you see a hoodie on sale and you are tempted to buy it, think for a moment.
Were you planning on buying a hoodie prior to seeing the sale? Do you need a new one? If the answer is no to either of those questions then you probably shouldn’t buy it.
Don’t fall prey to the marketing ploy. Buying something you wouldn’t have initially is still making an impulsive purchase. Just a less expensive one.
Cut back on subscription services
Our monthly subscriptions can end up costing us a lot of money.
Sure the initial monthly fee may not be breaking the bank, but over time the cost adds up.
This problem is amplified if you happen to be subscribing to multiple services. It’s a good idea to examine your subscriptions and cut what you no longer find useful.
It will end up saving you hundreds of dollars in the long run.
Constantly upgrading electronics is a bad money habit
Our electronics mean a lot to us. We spend hours of our day with our faces buried in them.
So why are we so keen on getting rid of them so quickly?
It seems people rush to the newest upgrades as soon as they are available. But what is the point in that?
The old phone probably works just fine. Why make such a hasty and expensive purchase?
Sure it’s shiny, new, and exciting, but after a few weeks, you will probably think of it the same as you did your old phone.
Our money habits are vital to our finances. And unfortunately, buying expensive new gadgets when our current ones still work perfectly well isn’t doing us any favors.
Conclusion
Our money habits are important.
If we have good ones then we can be financially secure. If it’s the opposite, then we have some issues that we will need to work out.