Bad financial habits are everywhere. But not all of them are commonly talked about and dealt with. Even if you are not drowning in debt and borrow only from a licensed money lender Singapore lowest interest rate, bad money habits can still take a toll on your life.
Here are five of those bad financial habits that people often do not take seriously.
Paying only the minimum amount on your credit card bill
This is a no-no in financial health. As much as you can, pay the full amount each month on your credit card bill. If you pay less than the full amount, the bank will slap you with interest charges. The more you leave unpaid, the higher the interest. These can easily add up each month you pay only a partial amount.
If you find yourself scrambling for money to pay your monthly credit card bill, chances are you’re using your credit card the wrong way. A good rule of thumb is to never buy on credit what you cannot pay for in cash. In other words, if a purchase is beyond your means, do not use your credit card. Installments are okay, as long as you know you will earn enough each month to cover the monthly payments.
Small expenses that add up
Small expenses include a daily cup of Starbucks, bottled water, and takeaway dinners. Taken individually, each of these items may not cost a lot. But if you look at the combined cost per month, then you’ll see how they can add up. These accumulated ‘small’ expenses can easily suck money from your budget.
The important question is this: Are they really necessary? Do you really have to order a Starbucks coffee every day? Do you really have to buy bottled water often? And do you really have to order takeout every evening? Most of the time, the answer to all of them is “no.”
Eliminate those small expenses. Then you’ll see how much money you can save.
Putting off debt repayment
Paying off your debts should be a priority. The sooner you get out of debt, the faster you can start building wealth for yourself.
There’s an old saying that goes, “The borrower is a slave to the lender.” That means you can’t quite move forward in life if you still have debts to pay. Lenders, banks, and people to whom you owe money will keep badgering you to pay up until you do. And this is stressful.
Not following your budget
If you have a budget but don’t follow it thoroughly, you can still set yourself up for financial trouble. For example, you set a leisure fund of $500 per month, but you routinely go over the limit. That means the extra money you spend will eat into the other parts of your budget.
If this habit persists, a time will come when you will find yourself lacking money for even basic needs.
Not investing
Investing may be scary, especially if you have been a victim of an investment scam. No one wants to see their hard-earned money go down the drain so quickly. Even if you haven’t been scammed yourself, you may still have fears and doubts about investing.
But keep in mind that if you do it the right way, investing is a good way to grow your money and build wealth. Also, these scams do not represent the true picture of investing.
Just keep two things in mind:
- Invest only an amount of money you can afford to lose.
- The gains are long-term.
Investing is not a get-rich-quick scheme. You can easily spot a scam if it promises high gains in just a short time. Also, every legitimate investment carries the risk of losing money. For this reason, it’s a bad idea to pour all your life savings into a single investment vehicle. If it flops, you lose all your money. Diversify your investments, and only invest what you are willing to lose.
Conclusion
Bad financial habits can ruin your life now and in the future. Be aware of the five bad habits above. If you catch yourself doing them, take steps to build healthy financial habits quickly. With those, you can start building wealth sooner and secure your future.
