Impulsive Buying
Buying things is not bad, but if you do it even when you actually have to buy that extra television just cause it’s on sale then you have a problem. Impulse buying will make a huge dent in your budget and it can derail your plans for the future. Do not justify every unplanned purchasing decision you make because it only makes it worse. Do not use your credit card for these impulse purchases because it is much easier to binge buy things when you don’t see the actual money being spent. Just stop and before buying anything, think about whether you really need it or not.
You Keep Up With The Joneses
You see a new phone and finds out that Jerry from the other department has it already and you line up the next day to get one. Your old phone is perfectly capable and you had it only for a year and suddenly you replace it. Do not always be affected by what other people are doing or even buying. In times of envy, remember that some other people don’t even have a phone and that the money you will be spending just because you are envious can be better put in a savings account or a smart investment.
Retail Therapy
This may be hard for some, but buying based on your mood is never good. When you are emotional, you tend to get your spending out of control. Plus, it can be addictive and you will have a difficult time breaking this habit if you do not stop now. There are other ways to cope with your emotions in a less financially damaging way. You just need to find it.
Wanting a Miracle
Some people blame their lack of financial freedom with the fact that they don’t have enough money to make it and that they need something miraculous to actually get to that point in life, like winning a lottery and marrying a millionaire. This kind of thinking will definitely get you stuck in that rut. Working hard and learning is still your best bet when it comes to becoming financially free. Don’t let someone else do it for you and give yourself more credit and believe that you can do it on your own!
Lavish Lifestyle Inflation
Everybody wants a nice house, a nice car and all the nice things they can get. But the key here is to not want something that you cannot afford yet. Yes, you want it, but do you need it? A house is a nice investment, but if having a house means you paying off more than you are earning, then you may be putting yourself in a tricky financial position. Be patient and only get the things that you need at that moment. The rest will just have to wait until you get to a position where you can actually afford that nice thing.
Ignoring Your Growing Debt
It’s easy to ignore your bills, phone calls from creditors and collection agencies. But what is not easy is later realizing that you have a mountain of debt to pay. Do not be ignorant when it comes to your debt. It’s understandable that you hate getting that call from the collection agencies but you do have to acknowledge it. Know how much you owe and create a plan around getting all your bills and statements settled.
Availing Interest-Free Loans
Points and rewards reel you in. You see no-interest loans offer and you simply cannot resist. No matter how they showcase it, these are still debts that you are incurring. Do not get reeled in by this kind of offer because, in the end, you still need to think about paying it and the so-called interest-free period ends. You then realize it is real money that you have to pay them with.
Just Paying the Minimum
This is how credit card companies get that interest that enables them to get more. You pay the minimum, which is only about 4% to 6% of your balance, and then the next time you pay, you owe them more. Always pay more than the minimum payment. Do not get fooled into believing that you only owe them that minimum amount. Base your payments on the balance and do not let your balance accrue more interest.
Zero Debt Planning
You feel so confident that you would be able to pay off your debts that you don’t actually have a plan for paying it off. Wrong! Your income is not only for paying off debts so you aren’t exactly sure that you would be paying it off on your next salary or even your next next salary. Create a plan. Get your Income then less your expenses unto that and that is when you will see if you are able to pay it as quickly as you would like. Having a plan makes paying off your debt less stressful and you will ultimately see the amount of time you need until you get rid of that debt.
If you have one or two of these habits, then it is high time for you to start thinking. Get rid of these habits and you are surely one step closer to achieving financial freedom. And if you do not, then you are only setting yourself up for more debt collection agencies calling you and having more bills unsettled.
