Everybody has goals that they want to achieve after a certain period. There is a wide range of goals, and some of them include improving one’s financial situation. Speaking of finances, if you are getting money, you should have a proper way of managing it. Part of the management of money includes doing way with bad money habits. Doing so will help you secure your future for the better. Many people may not know that they have money habits, and this is even more dangerous. Well, let us highlight various bad money habits you need to unlearn and how to fix them.
1. Spending All Your Earnings
This is the most common problem many income earners have. Once they get money, they splurge it all. Most of the time, they even end up buying things that they do not need. So what is the remedy? Savings. Make sure that you save a substantial amount of money after getting your paycheck. This will come in handy when you need some money for certain tasks or during emergencies.
If you find it difficult to ascertain the amount you should save use the 50-30-20 rule. This rule states that you should use 50% of your earnings on necessities. 30% of your earnings should go to your wants. Here you have things like entertainment and dining. Then 20% of the earnings should go to savings. This is just a rough idea of how to save if you feel that you can save more, do it. It will help you a lot in the future.
2. Having No Idea Where Your Money is Going
Having no idea where your money goes is definitely one unhealthy money habits you should avoid. If you have ever asked yourself the question, where did my money go? You should take a step back and reevaluate your finances. The best thing to do in this case is to make a proper plan once before spending money at hand. This will help you avoid unhealthy spending habits as this is what raises such questions and leaves you in a financial burden. One way of keeping track of one’s finances is by writing down everything in a notebook. You can also use an expense monitoring application on your smartphone or tablet.
3. Not Getting the Right Information Before Getting A Car Loan
Loans are common things in many parts of the world as they help people get access to finances for certain things and repay over a suitable time. There are many types of loans, and one of them is a car loan. One money mistake people make is going for a car loan without gathering all the relevant information. This then leaves them in a financial limbo once the loan is approved and the car is purchased. One thing you can do is to get a car loan calculator to help you know how much money will be involved in the transactions. Thus online loan calculators, for example, scotia car loan calculator is handy in such instances.
4. Ignoring Your Bills
If you want to be broke and stay broke, ignore your bills. Of course, paying your bills on time can be challenging, but it is essential in creating a financially secure future. Furthermore, if you do not pay them, you may end up with bad credit. Here are some tips to help you stay organized to pay your bills;
- Keep all your billing statements in one place. You can choose one folder and put everything there.
- Keep a reminder on your phone of the due dates. This will help you avoid any interests.
- Chose the payment options that suit you.
Money is a vital but scarce resource, and therefore, all efforts should be made to keep it so that we can better our future lives. One of the most important things you need to do to achieve this is to avoid bad money habits. A good example of a bad money habit is ignoring your bills. You should pay your bills on time so that you do have to pay any interest on top. You should also have proper information on car loans before applying for one. It is also important for you to save and not spend all your earnings. You should also try to keep track of where every single cent of yours is going.