Drop These Bad Financial Habits

Now that January has come and gone, how are your New Year’s resolutions holding up? Hopefully, you’re making great progress! But keep in mind that it’s never too late to make a positive change, especially when it concerns your finances. As you continue to hone your financial planning skills, check for these five bad habits. If you’re practicing any of them, take the appropriate steps to drop them right away!

Competing. Be honest with yourself: Have you ever bought something in an effort to “keep up with the Joneses”? It’s understandable; social pressure affects all of us, and we often don’t even realize when we’re giving into it! Keep in mind that unless you’re Warren Buffett, there will always be someone who has “more”. Try to stop worrying about the neighbor’s new convertible or your best friend’s beach house, and set financial priorities according to what you truly want. When it comes time to retire and you have a generous fixed income, it might be other people who envy your smart decisions.

Impulse shopping. Impulse shopping is another pitfall of human psychology. Buying things can feel good, and retailers know all of the workings of your inner mind. Try to stick with your shopping list, and don’t buy things just because it’s fun. Remember, the thrill is temporary, but your retirement savings account should last for decades.

Rushing big decisions. You know what you want, and you want it now. Even when an item is a necessity, such as a new car, try not to be impulsive. By shopping around for the best deal, you can save hundreds or even thousands off of the sticker price. If you’re reading this article online, then you have access to a powerful comparison shopping tool: The internet. Use it to locate the best deals, and be willing to wait for a good sale if necessary.

Neglecting to talk about finances. You might think that by avoiding financial discussions with your spouse, you’re also avoiding marital discord. Unfortunately, what you’re probably doing is contributing to a big problem in the future. Make a point to regularly discuss finances with your spouse, outline your priorities, and work together to achieve goals. Sometimes this will require compromises, but that’s what marriage is all about.

Spending money on unhealthy indulgences. Everyone wants to have a little fun sometimes, and that’s certainly okay. But if you smoke cigarettes, drink expensive coffee, or enjoy liquor, you should save your receipts for those items for one month. Once you see how much you really spend on those indulgences, you might realize they aren’t worth the financial damage. This is especially true when you think about the possibility of future medical bills due to your habits!

We often focus on “to do” lists, but now we have also outlined some clear “don’t do’s”. By cutting back on these bad habits, you can get your finances in better shape than ever. For more information on budgeting, financial planning, or preparing for retirement, call our office and we’ll be happy to assist you.

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