Most financial challenges aren’t solely due to unfortunate events. They usually have a foundation of poor financial habits.

With effective habits, most financial challenges can be handled. With improper financial habits, even a modest unexpected expense can be devastating.

While there are many negative financial habits one could be guilty of committing, there are a few that are especially damaging.

Beware of acquiring these poor financial habits:

  1. A failure to consistently save money. People that are consistently free of financial challenges have a consistent saving habit. There’s always money available to handle the inevitable financial emergencies if you save part of your paycheck each time you get paid.
    1. Make a promise to yourself that you’ll save a certain percentage of each paycheck.
  2. Excessive spending. The more you spend, the less you have to save. It’s that simple. Spending too much money makes you vulnerable and more likely to have financial challenges. Very excessive spending leads to accumulating debt, which is the ultimate financial curse.
    1. Look for other ways to amuse yourself other than spending money you don’t really need to spend.
    2. Put a hard limit on how much you can spend each month.
  3. Excessive use of credit cards and other forms of debt. Debt is a significant obstacle to financial health and stability. Debt can be cumbersome to eliminate, and most debt comes with expensive terms that make debt an especially costly way to spend money.
    1. Beware of debt. If you have to use debt to purchase something, especially something non-essential, it’s a good bet that you can’t afford it.
  4. Ignoring bills. No one likes to pay bills. Period. However, bills have a way of piling up and eventually have to be paid. During that time, you’re still spending money that should be going toward your bills. This is a huge mistake.
    1. Spend a few minutes each week paying your bills. Make it a ritual you perform one day a week.
  5. Regularly paying penalties, fees, and excess interest. Did you know that credit card companies earn more money from late fees than they do from interest? ATM penalties are steep. These interest-free loans have huge interest penalties if you don’t pay them off on time.
    1. Pay your bills on time. Use ATMs that don’t require a fee.
  6. Raiding your savings, investment, and retirement accounts. There may be times that dipping into your savings or other accounts might be justified, just be sure it’s for a good reason.
    1. Cashing out part of your 401(k) for a trip to Disney World doesn’t qualify as a good reason. Wiping out your savings for a classic car probably isn’t a great idea either.
    2. Savings accounts are for saving. Investment and retirement accounts are for saving and building wealth. They don’t work well when you take money out of them.
  1. No budget. Everyone needs a budget. Even a billionaire should have a budget. Budgets set financial limits, and financial limits help to prevent financial challenges.
  2. Eating out excessively. Eating out is expensive. Even fast food is more expensive than a decent meal at home. Meals at home tend to be healthier, too.

Are you guilty of any of these habits?

Think about someone you know that has a decent job but seems to struggle financially. Count how many of the above negative habits that a person is guilty of committing. Now, consider someone you know that never seems to struggle financially. How many of these poor habits do they have?

The results won’t be surprising!

Positive habits lead to positive results. Ensure that your financial habits are leading you to a place you want to be in.

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