Beating bad money habits
Keeping track of your spending and budgeting your personal finances is a time consuming yet extremely important task. You can find yourself in a world of trouble when you let your money slip through your fingers with frivolous purchases here and there. If you think you're the only one that struggles with money, think again. Millions of people today are barely scraping by; many have already declared bankruptcy or are on the verge of it; and millions are spending more than what they actually make. Beating bad money habits can be tough, especially if you're used to living a certain way. But if you plan to have anything by the time you retire you have to get in control of your finances today; because tomorrow it may be too late. Here are some helpful tips to help you beat bad money habits.
Tip #1: Stop using Credit
Most people that have bad money habit are using way too much credit. Credit card companies will issue a credit card to just about anyone, so don't be flattered if you get one in the mail say that you've been "pre-approved" because your credit is so great. Those that have excellent credit have it for a reason; they don't use it, or they actually have the money to pay of their purchases. Credit is the number of way to dig yourself into a hole of debt and sometimes never get out. Although it may be hard if you're used to buying on credit, but make a change and get rid of the credit cards. Don't let anyone tell you that building credit is vital to buying a home or qualifying for a loan. If you are in control of your personal finances and start saving, you'll have the money you need in cash to buy whatever you want.
|
|
Tip #2: Spend less than what you make
Sounds easy and very simple, but you'd be surprised at how many people spend more than what they actually make for various reasons. The main reason is to carry the façade of making more money than you actually do or "keeping up with the Jones's." What nobody tells you is that the Jones's are broke and in some serious debt. On the outside they look great; they've got the house, the car, all the trendy clothes and gadgets you would ever need, but on the inside they are drowning in their own debt. Mostly because they have allowed themselves to spend more money than what they make. Credit cards have a great way of helping you do that. Once you get rid of the cards, you start spending what you make and have to actually budget. Which brings me to the next tip on beating bad money habits.
Tip #3: Make a budget
In order to beat your bad money habits you need to budget according to what you make. You need to account for every single penny that you are spending; know where it's going; and why? Calculate how much you make and compare it to your spending wants and needs. Most likely you will need to cut some things out. Don't leave any money unaccounted for even if you have to just throw it into a category. Knowing where it's going (even if you don't use it this month) gives you control over your money and not the other way around. Then when that emergency comes up, or you need some money for a new pair of jeans you've already budgeted into your finances and you won't stress out about having to get them. Another good rule of thumb is if you're out shopping and see something you really want (or think you need), wait on it. Give yourself a good 24 hours to make the purchase. That's about how long it takes for us to think rationally about something we "absolutely have to have."
Tip #4: Start saving today
Even if you can only put $10 into a savings account it's worth it. By the end of the year you will have $120 saved and you never know when something's going to come up. Ideally once you get yourself out of debt and have more freedom to save, you will want to keep about $1000 aside for emergencies and hopefully about 3-6 months of salary.
It doesn't take a rocket scientist to figure out that beating bad money habits is the best way to save for a future. It does take some brains though trying to budget, save, and get in control of your money. Hopefully these tips will help you get started.
