Time to Kick These Bad Money Habits

It’s no secret that good financial habits are an essential part of financial success. Learning to spend and save mindfully improves your financial situation and also helps you reach your financial goals sooner while avoiding unnecessary debt. If bad money habits are holding you back from achieving financial success, try kicking these five bad money habits to start.

1. Letting your insurance auto-renew

Being complacent about insurance and letting it auto-renew every year could cost more in the long term. Just as your life circumstances change, your insurance cover too, which is why an annual insurance review makes perfect sense. With that, book an annual insurance review with your insurance broker to check that your insurance is fit for purpose, and avoid being left with too little coverage or paying for insurance cover you don’t need.

2. Spending without thinking

It might not feel like a huge amount buying a $5 coffee each day, but impulse buying or discretionary spending can quickly add up to a sizeable chunk of spending over a whole month. Avoid unnecessary spending or at least factor into your budget these extra costs, so you’re spending mindfully fully aware of the impact these expenses could have on your financial goals.

3. Not sticking to a budget

Budgeting might not sound like fun, but without a budget, it’s hard to completely control your finances. A budget helps you get a clear understanding of where your money comes from and where it goes. Moreover, it helps you plan or cut expenses to reach your financial goals. On the contrary, it’s easy to overspend without a budget which could land you in serious debt. If you aren’t already budgeting, start with a simple spreadsheet to track your income and expenses.

4. Relying on credit cards

Credit cards may be useful when you’re in a tight spot, but raising credit card debt is an expensive lesson in finance. While credit cards are helpful when it comes to establishing a good credit record, for emergency purchases, or taking advantage of rewards or points, the golden rule with credit cards is to only spend what you can afford to pay back in full each month.

5. Ignoring debt

Knowing how much money you owe can be a scary thing to face. But pretending your debt doesn’t exist isn’t a helpful strategy and can cause more damage. Late repayment fees and interest charges could plunge you even further into debt, while a bad credit score impacted by late or missed repayments makes it harder to access good credit in the future. Getting clear on how much debt you have can help you plan a repayment schedule and tackle the issue head-on. 

Talk to an expert         

Another good financial habit that could help set you up for financial success, is to talk to a finance professional who can help you plan your financial future. Get in touch with a Mortgage Broker today to get expert financial advice tailored to your unique situation.