Nearly everyone has a few bad money habits that are causing them to lose out on money or spend more than they should. Breaking these bad money habits allow you to accumulate wealth more quickly, giving you greater financial security. Here are some of the most common bad money habits and how you can change them into good money habits.
Paying ATM Fees
There are so many ways to avoid paying out of network ATM fees, which now top $4 per occurrence on average, that it is amazing that banks are still making money on them. It is easy for most people to avoid ATM fees by preplanning where to get money before leaving the house. If there are no ATMs branded with your bank along your route, you can obtain cash from many grocery stores and convenience stores for free by asking for cash back when making a purchase.
Frequently Buying Snacks And Drinks
Frequently buying snacks and drinks at retailers other than grocery stores is another bad money habit that you should break. Buying items at these locations often cost much more than buying similar items at a grocery store, but the increments are so small that most people do not realize just how much they are spending. To save money, buy the snack items that you like in larger quantities from grocery stores, then package them into individual portions that you can take on the go.
Failing To Track Your Spending
Failing to track your spending is a bad money habit that is very simple to break. Tracking your spending is important for knowing where your money is going and identifying areas of overspending. This might be the easiest bad money habit to correct as there are many apps now available that will automatically track your expenses for you. I like Mint myself, but there are also tracking apps available through Learnvest, at You Need A Budget, and through banking apps.
Carrying High Interest Debt
High interest debt quickly drains your wealth by charging you money every month for money you spent in the past. Eliminate these interest payments by getting rid of your high interest debt as quickly as you can. Look to cut spending in your budget to apply more money to debt reduction and focus on the debt with the highest interest first to get the biggest savings. Once that debt is eliminated, start again with the next debt on the list.
Paying The Minimum On Credit Cards
Many people do not realize that paying the minimum amount required for their credit card payments can keep them in debt for decades. That is because the minimum amount only includes the interest charges owed and about 2 percent of the balance. Instead of paying interest for your previous purchases month after month after month, pay as much as you can each month to bring down the balance quickly. Once you have eliminated the current balance, limit your spending on the card to an amount that you can afford to pay off each month.