The day I got the offer letter for my first job, I sat and made a list of things I wished to buy with my first salary. I was just too excited to be making my own money so much so that I left for shopping the very next day of receiving the paycheck. Despite planning to buy a lot of things, I just couldn’t muster the courage to part with the money I had worked so hard for. That day, I realized that no matter how big my wishes were, I only had a limited supply of money and to save it would be the best decision I could take. I bought only the things that were actually needed and I was much happier about it.
A lot of things have changed since I started managing money on my own and I’ve understood that it’s not easy to make money. I now happen to realize that bad money habits can get addictive with time and it can take a lot of work to get rid of them. You might be willing to make adjustments to your budget to accommodate that expensive handbag you saw at the store but it won’t be long before you start regretting it. In the long run, you will need a solid strategy to take control of your finances. And the first obvious step you need to take is to shed those bad money habits that have been eating away all your savings.
If you are stressing yourself over not being able to save any money because of your poor money habits, let me tell you that it’s never too late to change that. Provided that you are earning money and have the unending desire to save as much of it as possible, here are a few bad money habits that you need to change now:
1. Impulse Buying – I used to be a victim of emotional buying until a few years back. My intuition would always guide me against unplanned impulsive purchases but I had this habit of giving in to my moods. I would go to the stationery shop with my brother to help him buy his school books only to come back home with a number of comics and magazines that I didn’t have any time to read. I was so gripped by the fear of missing out on sale seasons that I made it a habit to keep a tab on everything related to shopping.
In my early 20s, when I started feeling the urge to have some money in my savings account, it hit me how I had been wasting my money on impulse buying. Things have changed a lot since and I usually make it a point to ask myself a few questions before buying anything on impulse –
- Do I really need the product?
- Do I have money to buy this product?
- How long is this product going to be useful?
- Are there any cheaper alternatives to this product?
I sometimes even sleep on the buying decision to help myself gain perspective on why and why not to buy the thing.
Emotional buying won’t look like a big deal initially, but it can really get out of hand if you fail to acknowledge it as a harmful money habit. And you would be surprised with the amount of money it can save you to plan and think before buying anything for yourself.
2. Credit Cards – If you rely too much on a credit card to carry out your day-to-day transactions, you might want to rethink about using it the next time. Credit Cards make it easier to spend money that you don’t have and the interest rates charged are sometimes too much to bear.
Another factor that makes a credit card risky for your financial health is how it allows you to buy anything in a swipe of a card without any need to part with the physical cash. Try adopting a cash only lifestyle and you will start noticing a positive change in your spending habits. The amount of cash you can carry in a wallet is quite limited that forces you to save it for only the things that you actually need.
3. Excessive Housing Costs – When I moved out of home to a new city, I ended up renting an accommodation based on a lot of factors – the proximity to my college, food, room space and the surroundings. The rent was a bit much but I found it viable for the facilities offered. As I started living in the place and got to know the nearby areas, I realized that I could have found the same or even better amenities for lesser money. As soon as my lease expired, I shifted to a new accommodation that helped me save a lot of money.
Sometimes, you don’t realize how much excess amount you might have been paying for housing in the form of insurance, repairs, rent, maintenance and utilities. By being a bit calculative about your housing expenditure, you can decide on moving to a place that can provide you the required facilities while keeping the costs lower.
4. Keeping Up With The Joneses – While it’s good to pick up good money habits from your surroundings, it’s often these very surroundings that make you want to live a life that you can’t afford. If you wish to live within your means and want to save money for your financial goals, think about the extent to which your spending habits are governed by your close friends and associates. If possible, try making a few frugal changes to your lifestyle and consider spending more time with people who are good at managing money.
Quitting bad money habits won’t be as hard if you are doing it with the right intention. Well, I also believe that it’s okay to have cheat days sometimes by allowing yourself to buy something that you love. But be sure not to make it a habit. No expensive product can make you as happy as the savings that can protect your future.