Getting away from the “broke” label and lifestyle can be really, really hard. It takes dedication and a sharp eye on your finances to break free of broke.
For a lot of us, it seems like an impossibility. Every expense is a necessity. Sometimes it’s hard to see with clear eyes just what exactly it is that seems to suck up your paycheck each month. Bad financial habits are a big part of these drains.
There are things we all do that keep us in a broke lifestyle. At first glance, they may seem innocent enough, but once you understand the full financial impact of bad financial habits, they can become a lot easier to break.
Part of understanding your money is understanding how you relate to money. Bad financial habits may come from examples your parents set for you, or from a need or desire to fix things with money.
Don’t feel bad about having them – everyone does. I know I’m a total sucker for last minute purchases while I wait in line at stores. Candy, chap stick, magazines…I’m standing there and they’re just staring me down!
Here are the three most common bad financial habits that can cost us the most. Break these and I promise you’ll hang onto more of your money each month!
1) Telling Yourself you “Deserve” Something
Giving ourselves permission to spend a little extra this week because we “deserve” something is a really bad financial and personal habit to have.
First, it gets you in the mindset that you need a reward in order to get through something or to get something done.
Second, it can have no limits. Sure, you might deserve that $1 candy bar. Or you might deserve that $100 new dress. When you blindly give yourself permission to feel better through spending, you’ll spend until you feel better. What that limit is, no one knows.
It’s not a sustainable habit. Eventually, you’ll run out of money. Or worse, you might put it all on credit cards only to run out of credit and damage your credit score.
On a personal level, it’s similarly unsustainable. You can’t always seek validation or comfort from material things. You can’t continually justify purchases because you’re a good person or a hard worker.
Those things may definitely be true, but is that dinner out really the way you want to prove that?
Get rid of the “I deserve it” mentality and I promise you’ll feel more fulfilled. As a bonus, your bank account will stay out of the red.
2) Continually Buying Cheap Things
God knows I love a good sale or a good deal. I love the feeling of knowing I got a bargain. However, getting a bargain is very different than buying cheap things.
If you get $9.99 shoes from Payless, that’s not a bargain. It’s just a cheap pair of shoes. They won’t be well made, they won’t last, and they won’t be particularly comfortable. Soon enough, you’ll burn through them and end up buying a new pair.
Buying quality material items is a bigger up front purchase – say $90, instead of $9.99. But if you spend on quality, it’ll save you money in the long run.
You won’t have to replace a nice pair of leather (or nice faux leather!) shoes in the same time frame you have to replace your Payless ones. You’ll get more wear out of them, and they’ll look nicer.
Break the continuous bad habit of gravitating towards the cheapest thing.
The same goes for things like electronics, beds, or kitchenware. You may find a set of plates at Walmart for $15, but if they’re not microwave safe and snap under a heavy load, you’ll be replacing them before you know it. Instead, invest in solid porcelain or china plates and they’ll be something you can hand over to your kids someday.
3) Knowing How to Say No
Saying no can be astonishingly difficult. When a friend invites you for a night out, you don’t want to be rude, and you don’t want to miss a chance to hang with a friend.
Do you really want to spend money in that way, though? If your friend wants to go out drinking all night, and you can’t handle more than two beers, that’s probably not the best way for you two to hang out.
Knowing when to say yes and when to say no to expenses is the best habit to form. Learn to say yes to things you value. Learn to say no to things that aren’t important to you.
Just because a friend or family member wants something doesn’t mean you also have to want it. When I was paying off my debt, I skipped being a part of my extended family’s secret santa. I got a little grief from an aunt, but my debt payoff was far more important to me than it was to be a part of that one Christmas tradition.
I still got to see my family for the holidays, eat way too much, and watch Christmas movies. I still got a few gifts from the big guy himself. And now I’m debt free, ahead of schedule, and I will be participating this year.
Get out of the bad habit routine and watch how your mindset and lifestyle change. It’s pretty incredible stuff!
What are some bad financial habits you see in your life? How do you plan on breaking them?