We all have bad habits, some more damaging than others. But bad money habits can have serious consequences for your daily life – and your financial future. If you’re guilty of the following, consider taking steps to make a positive change.
• Not saving for emergencies. Unexpected emergencies can wreak havoc on your finances if you’re not prepared. Your car could break down, you could chip a tooth on that piece of Halloween candy you probably shouldn’t have had – anything can happen. So, it’s essential to set aside some money each month should something happen. For more information on starting an emergency fund, click here.
• Spending blindly. Not having a budget is one of the worst financial mistakes you could make. Small purchases can really add up and if you don’t keep close tabs on your spending, you could end up with no money left for groceries or a huge pile of debt. For help creating a budget, check out these budgeting calculators.
• Ignoring bills. Stuffing bills in a drawer or never opening them in the first place won’t make them go away. You still need to pay them – and if you don’t, you could owe even more money in interest. One way to change this behavior is setting up automatic bill payment.
• Not contributing to a 401(k). If you’re young, retirement might seem a lifetime away. But there are many advantages of starting a 401(k) – setting aside money starting now could translate to tens of thousands of dollars extra down the road. Your future retired self will thank you.
• Maxing out credit cards. When used correctly, credit cards are an effective and useful tool to help you make big purchases and build a good credit history. But if you rack up more charges than you can pay off every month, you could do some serious damage to your credit score.by sophie