5 Habits that You Didn’t Know were Hurting Your Finances
Improving your finances can come down to three big ideas: stopping “money leaks” whenever possible, earning more money, and cutting down on debt. But truth be told, in many cases the path to financial success has more to do with stopping bad habits. You may be surprised to discover the impact of a daily morning latte or a new pair of shoes every few months. Let’s take a look at some of these bad habits in order to get your finances back on track.
1. Trying to Keep Up with Friends
While some people don’t pay attention to what other people are doing, many of us unconsciously try to keep up with friends and neighbors when it comes to possessions or lifestyle. When a friend purchases a new computer or takes an expensive vacation, it can trigger competitive behaviour that leads to poor financial decisions. It’s easy to fall into the trap of trying to buy things that others have, but remember – your financial situation will improve significantly if you spend on the things that matter most to you, not to anyone else.
2. Shopping as a Hobby
Who hasn’t had this experience? You walk into a department store looking for a new shirt for work and end up walking out with several complete outfits. Impulse buying feels good – some scientists claim that it actually releases endorphins to the brain similar to those released when exercising or eating chocolate. Unfortunately, the quick high of shopping is followed by a sobering low when you discover the impact it has on your budget. “Retail therapy,” or shopping to improve your mood, is the quickest route to overspending. Before you hand over your credit card, think twice about your reasoning for making the purchase.
3. Morning Coffee
“The latte factor.” It’s a real thing – financial experts have determined that a daily cup of coffee from Starbucks could be costing you up to 1,000 dollars per year. Spending on seemingly innocent purchases like coffee can add up quickly; think about how much you could save by brewing your own coffee at home. One thing is for certain – you’ll be pleasantly surprised when you see how breaking the Starbucks addiction can impact your budget.
4. Too Much TV
It may seem like a stretch to connect TV-watching with your personal finances, but it’s more valid than you may think. It’s a well-known fact that one of the main purposes of television is to sell – that’s the reason for all of the commercials. From a financial point of view, watching TV trains us to be consumers by introducing us to products and services and convincing us that we need them. Even your favorite television programs are likely to feature products that you’re apt to want or purchase. Try cutting down on your TV time – you may notice a growth in your bank account!
5. Not Tracking Spending
One of the habits that can hurt your budgeting the most is spending without tracking. Trying to keep track of cashflow in your head is nearly impossible; if you don’t know how much you’re spending, you’re more likely to spend more than you earn and increase your debt. Personal finance apps have made tracking your money much easier than you would think – they do the dirty work for you. inBudget have many features that offer unique advantages to improve your money management and make it as easy as possible.