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Entrepreneur's Corner

Here Are Toxic Money Habits You Should Avoid

BY Jane Muia · May 9, 2022 02:05 pm

KEY POINTS

When it comes to spending your hard-earned money, your habits can make the difference between reaching your financial goals or living paycheque-to-paycheque.

KEY TAKEAWAYS

Old habits die hard, and one of the oldest habits is using checks to pay bills or make savings deposits. “Personal finance habits take longer to change.

Saving money might feel daunting but as we all know, what feels good is not always good for us. Saving money might not give you that same immediate reward, but it pays off big time in the long run.

Some big or small money habits can quickly ruin your financial plan or even end up leaving you with an empty wallet. To avoid future financial crises, you need to properly budget your money.  You need to be able to track habits that might be costing you extra.

Here are some of the habits you need to avoid before going broke.

  1. Spending More Than You Earn

As the old saying goes, we are what we repeatedly do. When it comes to spending your hard-earned money, your habits can make the difference between reaching your financial goals or living paycheque-to-paycheque.

To achieve this, you need to avoid overspending on unnecessary things and go for the basics. Having all your purchases and expenses laid out in one place to see where your money goes can be a sobering experience.

This way, you will also be able to see where you are overspending and where you can cut back. Making this a routine will make your financial planning simpler.

  1. Stop making it hard to save

Old habits die hard, and one of the oldest habits is using checks to pay bills or make savings deposits. “Personal finance habits take longer to change. Saving money might feel daunting but as we all know, what feels good is not always good for us. Saving money might not give you that same immediate reward, but it pays off big time in the long run.

How much you should set aside for your savings is totally up to you. It’s good to be ambitious with your goals, but it’s also good to not push yourself too hard.

  1. Stop complaining about your paycheck

Whatever energy you’re spending complaining about the size of your paycheck takes energy away from finding ways to improve your bottom line. Think you’re being underpaid? Negotiate a raise or at least talk with your boss to understand what’s needed to see a bump in pay. If you’re valued, your supervisor will see the implicit threat that you may leave for a higher-paying job. Start looking for that more lucrative gig while you’re at it.

  1. Ditching Your Change

For people who still use cash when out, the amount of change received on a daily basis can add up. Don’t just disregard your coins. Instead, save them in a jar and periodically bring them to your bank for sorting and deposit. You’ll be surprised at how much you save over time. And you can grow those savings even more by putting them in the right savings account.

  1. Not Keeping an Emergency Fund

Without an emergency safety net in place, it’s easy to break out the credit cards and ruin a well-thought-out budget if the car breaks down or the roof leaks. Having an emergency cushion of three to six months’ worth of expenses can keep your plan in place when unexpected events occur.

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