What’s the first thing that you do in the morning after you wake up?
Do you check your email? Scroll through Facebook? If you’re like most, you brush your teeth, put on your pants and hold your coffee cup the same way every morning. These consistent acts create our array of personal habits.
Oftentimes, we create habits without evening knowing. Some habits have positive effects, while others can negatively impact our wallets and our success. And when it comes to money, breaking common financial habits is tough. Imagine if you we’re more mindful of your actions. You could gain the power to make this positive change.
If you want more money in your pocket and hope to improve your financial future, here are 5 habits that you should really consider breaking.
Stop Impulse Buying
Will Rogers once said, “The quickest way to double your money is to fold it in half and put it back in your pocket”. By deciphering between what you “want” and what you “need”, you’ll become much more capable of limiting purchases based on emotion and immediate gratification. The habit of buying everything that catches your eye can unintentionally lead to a buildup of unneeded clothing, food, electronics, etc. These purchases are a sure-fire way to decrease your ability to saving money.
Relying too Much on Credit Cards
Did you know that people will spend as much as 83% more money when paying with a credit card instead of cash?* Using a credit card is common practice as it removes the emotion of exchanging your hard-earned cash for your desired purchase. But this habit may lead you to think less about the real cost to your pocketbook; because you haven’t paid the bill yet. Paying with cash, when possible, is a habit worth considering.
Do you pay a monthly landline prone bill even though you primarily use your cellular phone? Do you pay extra for cable television channels and streaming movie services through your Internet provider, that could be available for free over the internet? If this describes you, it may be time to get into the habit of reviewing the features and benefits included with current monthly subscriptions. Paying two separate expenses for the same service only hurts your wallet.
Not Taking Advantage of Better Pricing
When new cars first get released, their price is sky high. The same is true for Phones and electronics. It’s very easy to get sucked into the hype and paying the costs for “luxury” or the thrill of being the first on the block to own something. However, you know that simply waiting just a few months after the release will likely lead to significant price drops. Getting into the habit of waiting for better pricing is always a smart decision.
Neglecting Long-term Planning
Avoiding your plans for retirement is a habit that will more than likely be dangerous to your financial health. Giving little attention to your financial future is a mistake that can lead you astray; especially once you’re retired and your primary source of income disappears. It’s advisable to talk with a Certified Financial Planner who can help you make smart financial plans that better prepare you for the future.
When you’re conscious of the incredible impact habits hold, you’re better prepared to decide whether you need to continue feeding them. It’s in your hands to use the power of habit to your own advantage.
Journalist, Charles Jaffe, said it best, “It’s not your salary that makes you rich, it’s your spending habits”
* Source: https://www.valuepenguin.com/credit-cards/credit-card-spending-studies
Jerry Freedman will start his freshman year at University of Miami, Coral Gables.
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