26 Bad Money Habits to Stop Starting From Now - Personal Finance & Making Money

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Last updated on September 21st, 2024 at 10:28 am

Everyone has ever experienced bad money habits in his or her financial lifestyle on different occasions, there are several ways to describe poor financial practices in our day-to-day lives according to our actions. Sometimes poor practices can only be ascertained from the outcomes.

When you go shopping at the store on a budget and you find everything discounted, you don’t have to irresponsibly exhaust the balance it should be carried forward for the next visit.

Honestly, we are all humans no one is perfect but to some extent, we need to get some things done the right way when it comes to our financial well-being.

Table of Contents

What Are Bad Money Habits?

These are unhealthy money practices that may limit us from reaching our life money goals. Some outcomes of poor money habits include continuous credit card debts, living paycheck to paycheck, financial stress, and more.

Why Do People Present Bad Money Habits?

Some people present bad money practices for different reasons as explained below.

Emotional Spending

When some people are going through certain life challenges tend to find relief from spending for example going out to kill boredom and stress at the bar.

Inadequate Financial Education

Many people lack proper formal guidance on how to manage their finances to make better decisions in times of budgeting, saving, and investing.

Peer Influence

When you connect with people who live extravagantly definitely you will adopt their way of living to keep up with them.

Persuasive Advertisements

Strategic advertisements entice target customers to make purchases they didn’t budget. Sure, businesses invest a lot of money into advertisements to attract buyers to maximize sales.

Bad Money Habits to Stop

There is a list of poor money habits we need to avoid to keep in good standing with our finances. Without further ado, here we are with bad money habits we need to break right now.

Impulse Spending

When you have an impulse spending behavior there is no way you can keep money with you without making a purchase. If you are the kind of person you won’t be able to save because you drain your wallet all the time.

Spending money on things you find pleasing without planning won’t get you anywhere with your finances. Keep away from impulsive behavior to avoid spending because you have money in your wallet.

There are different ways many of us can use to free ourselves from this poor money practice for example sticking to a list, making a budget, not shopping hungry, and more.

Paying Unused Subscriptions

You don’t have to pay money for services not used at the end of the month. If you have a busy schedule sometimes it may be hard to get to the gym, video stream, use the home phone, and more yet you are paying for them every month.

There are hundreds of dollars spent monthly on subscriptions that we don’t consume. Check your subscriptions for the month to cut out those that you don’t use at all to save.

Depending On a Single Income

Another poor money habit anyone should break is surviving on a single income source for a living. In this unpredictable economy of today, you want to side hustle after your 9 to 5-day job for an extra income.

No matter how comforting your side income is, you need an alternative source of income. You can start a blog, Dropshipping, start an Etsy store, proofread, and more.

Depending on a single income source has a lot of challenges involved for example you won’t save enough, bills are not paid on time, and poor credit card scores. Get a side hustle job to supplement your day job for extra pay.

Ignoring Goal Setting

If you don’t have money goals you are walking a journey without a destination in life. This is a bad money habit anyone body should keep away from at all costs.

Let’s say you spend your salary every month on things that don’t add value to your life, it is time to start setting clear goals to achieve the best in life with your finances.

In the goal-setting process, you know why you are working, saving money, taking a loan, and starting a new business.

Not Investing

We all know that sacrificing hard-earned money for an investment is quite challenging for most people not yet into business. And some people won’t spend any money at all to start any other business due to experience.

However, when some things are done the right way investing money is the best way to go to achieve financial independence. Investing will make you an extra income outside your day job for a decent living.

Some of the ways to invest your money include starting a business and investing in the financial markets like stocks and bonds. Any type of investment you start will depend on your schedule during the day.

Not Having an Emergency Fund

You won’t know the benefits of having an emergency fund unless there comes a time when you get caught up in the trenches. Sure, you may get laid off from work with nothing saved at all and no one to run to for financial assistance.

It is hard to tell when you might lose that job, get bedridden, or get a car breakdown that is why you need a cushion of an emergency fund.

With an emergency fund, it is the only way you can cope up when you are in such a situation of financial constraint. Get yourself up with an emergency fund for protection in the future in case of an emergency.

Skipping Deals

Whenever you want to save money on purchases you must look out for discounted offers and sales. If you are not into hunting for deals on purchases you are not being fair to your finances.

Make your purchases in those great days for deals when most things are selling at almost half price. You will save a lot more compared to shopping during normal days.

We usually save big on expensive items because we marked the calendar for deals at the stores. It doesn’t cost you a thing to mark the days on the calendar for different stores when you want to save.

Delaying Payments

When you are the kind of person who delays payments sometimes you are charged fees hence paying higher than normal. The bad money practice impacts your credit score in the long run hence limiting your ability to borrow.

You don’t need to miss out on any bill payments for the month to avoid late payment charges. Rent, cable, internet, power, and more should be cleared on time with automation or any other convenient means.

Are you facing late payment charges at the end of the month? Stop delaying payments on bills and loans.

Withdrawing Savings

Savings for retirement should not be tampered with at any point in time before maturity. Whenever you make any withdrawals on retirement savings you incur fees and penalties.

Withdrawing savings can’t let your money grow hence putting your future at risk. Even when it is an emergency fund money should only be withdrawn for its intended purpose.

In case you are a person who touches savings in the account most of the time, it should be avoided to steadily grow money for your future.

Skipping Insurance

Some people think that spending a few hundred dollars a year on insurance is a waste of money. The day you get admitted to the hospital without insurance for days you may remain with nothing in your savings account.

There are different service providers with policy covers of your choice starting from life to general insurance. Don’t forget to shop around to get the best offers at a fair charge to save money.

Ignoring insurance should also be included among the list of bad money habits to break starting from now for the sake of saving money to cater to emergencies.

Ignoring Credit Card Best Practices

Credit cards make life much easier when it comes to spending despite high-interest payments on debts. However, over-reliance on credit card use can result in overspending which is not healthy for your financials.

Poor credit card usage will negatively impact your checking account and credit scores when debts are overdue limiting your borrowing potential with financial institutions in the long run.

Credit card balances should be cleared on time and also avoid moving with them unless there are rewards programs to consider for the day and other cost-effective offers.

Requesting Loans

If you can’t manage your loans the right way sometimes it is very hard to have something to save at the end of the month. Having high-interest recurring loans to clear every month will keep you in debt for years.

Some loans are good depending on the purpose but must be taken and managed responsibly for example mortgage loan for a house. Consider low-interest loans which can be cleared on time to avoid living in debt for a long time.

When you find out that loans are messing up your financials and you don’t have the discipline, skipping them is the best option until it is the right time.

Not Comparison Shopping

It doesn’t matter how much you earn for the month, if you want to save you must buy quality at the best price. This can be achieved only when you do comparison shopping at different stores.

So many apps out there can be used for convenience purposes to compare sales to save on various things you want to buy. This can take some time when you have a busy schedule but worth giving a shot when you are on a tight budget.

Not comparison shopping is a poor practice because you miss out a lot on deals at the stores and in the markets.

Not Saving Money

It doesn’t matter how much you earn but saving should be on the priority list of good money habits to practice. Several negative impacts come with not keeping money aside in your savings account.

You don’t have to be a finance expert to adopt money-saving best practices that work, it is all about commitment. If you are finding it hard to save the traditional way, use modern technology to automate savings from your checking account every month.

Sure, money goes into your savings without lifting a finger despite some charges which are worth the time needed to spend personally to deposit money into your account.

Spending More Than You Earn

Another bad money habit to break away from is spending all your paycheck earnings staying with nothing left. When you have nothing left you are most likely to have a credit card debt before the month ends.

According to the national capability study, in the United States of America over 20% of the population spends more than they earn.

If you are among the many your plan should be to find ways to extremely cut your cost of living expenses to save money. Despite your monthly earnings, you need to spend within your means to save.

Buying Out Lunch

People nowadays prefer convenience despite the costly lifestyle. Whether one has a busy schedule or not it is very possible to prepare meals at home within the week to save money eating out.

You can make orders online or head to the grocery store to buy cheap for the week to make your meals and avoid wasting money at the restaurant.

Compared to buying from outside no matter your schedule, making meals a few times a week saves a lot at the end of the month in your budget.

Not Keeping Leftover Money

Most people whenever they go shopping or on any outing don’t value leftover money. Some use it to buy things over what they had planned on the budget.

Using leftover money to make impulse purchases is not a good practice yet can be saved for the next visit or deposited into your savings account.

If leftover money is managed responsibly, when you do the math at the end of every year it makes a very positive impact in your financials. Start valuing your changed money whenever you are out by handling it responsibly to save it with purpose.

Giving Too Much

You don’t have to give a lot no matter how well off you are financially. When you give away too much you may end up with nothing to save.

Let’s say you are not achieving your goals as you wish, you should start looking into how much you are giving out to others as charity.

If you are giving out a lot then you should reduce how much you have been donating in your budget to improve your finances too.

Not Budgeting

Without budgeting, there is no way you will know where your money has gone. It is a good financial practice to monitor your income and expenditures for the month.

If you have a clear picture of the inflow and outflow of your money it is easy to know where to cut spending in the budget. This is all possible when you incorporate budgeting best practices in your financials.

Even when you are not budgeting savvy there are customized tools to use at no cost to you at all for example EveryDollar, Mint, and YNAB. You don’t have any reason for not budgeting finances when there are free tools that can be used at different stages.

Living a Luxurious Lifestyle

If you are living like the rich when you have not yet established a strong financial profile you are setting yourself up for failure. When you live luxuriously you spend more than you earn which may lead to poor credit card standing.

Living luxuriously is one of those bad money habits which must be avoided at all costs to save. Quit the showy lifestyle behavior by living below your means.

Let’s say you are driving a posh car, living in an expensive apartment, going out in expensive places, shopping in classy places and more all should be looked through for the sake of cutting expenditures.

Sticking To Brand Name Items

Most generic items are of good quality and cheaper than branded goods. Sticking to big brands when you are on a budget won’t do you any good.

If you are after cutting costs consider cheaper generic goods no matter your level of addiction with big brands. Yes, you want to buy branded items but they are expensive at the moment compared to your financial situation.

Avoid sticking to big brands in times of financial struggle to save money buying cheap.

Not Planning Retirement

Planning for old age is one of the most important things we must do when can still earn an income every end of the month from the day job. However, research shows that almost half of the population in the United States is not saving enough for retirement.

Not planning for old age is one of the poor money habits you must ditch from now. There’s no way you are going to have enough savings for retirement without planning.

Use high-yield savings accounts to automate retirement savings to compound your money for old age no matter how little you earn.

Lifestyle Creep

When you start earning more money you will want to spend more, this is known as lifestyle creep. People want to live the life they were dreaming about when they start getting better financially.

Instead of increasing savings, you want to get a nice apartment, a posh car, have a party every weekend, and more since you got a salary increment. You can’t save more money when you increase spending on your paycheck earnings.

Only Planning For Today

If you are planning for today only there is no way you will save for the future. Consider starting a goal-setting plan to successfully meet your future long-term money-saving plans.

Living in the moment you don’t get a picture of your future for effective planning. Quit living in the moment to start planning for your future with focus.

Buying Only New

New things are quite expensive compared to used items which are also in good condition offering the same purpose. Many platforms sell used quality products at very affordable prices for example craigslist and Poshmark.

If you are living on a budget quit new items to go for quality used items at cheaper costs to save more money. Sure, a lot of cheap used products in local thrift stores offer the same purpose as new.

Allowing Bad Checks

You don’t take time to thoroughly look at the checks you are depositing because you have busy schedules, right? For some service providers whenever you deposit a check and it bounces there are fees charged to you, which is a cost.

Start making sure that the checks you receive have no issues and that the check issuer will have money in the bank on maturity to avoid charges by the service provider.

FAQs – Bad Money Habits to Stop

How Long Does It Take To Do Way With A Bad Money Habit?

It might be hard to completely break away from a bad money habit depending on how long you have been connected to it. Let’s say you are addicted to credit card borrowing every month, start doing it at least once in quarter until you quit for good.

Is It Possible To Do Away With All The Poor Money Habits?

Nope, some poor money habits are just human and it is quite hard to completely get rid of them for example impulse spending and buying lunch. You can’t do away with all the bad practices completely but we can work upon them to some extent for the best.