Top 10 Bad Money Habits to Break in Your 20s & 30s

Our financial habits can have long-lasting and serious consequences. Impulsive buying or excessive use of credit cards can lead to huge financial losses, particularly if they’re sustained over a prolonged period. We live in the moment, and the next day, we are drowning in debt.

It doesn’t have to be this way. You can create a strong foundation for your financial future by being aware of your monetary choices. Here are some bad money habits that you can (and should) get rid of and replace with more positive money habits—and doing while you’re still young is the way to go.

Paying for things you don’t use

Sometimes purchases can make us more of who we want to become. Your gym will not stop charging you if you stop going for the first two weeks in January.

Check your credit card statements and other accounts a few times per year to verify that you are using all the services you have paid for. If you don’t use your subscriptions, such as a $10 app subscription or $25 premium social media account, or a $5 magazine, it could cost hundreds, if not thousands, each year.

A lack of savings goals

People want to save money. Saving money is a desire that you have in your head, but you won’t save much if you treat it as a distant dream, or a “one day, maybe”. Another habit of inaction is when you have a plan, but take very little or no action to implement it.

You can break this bad money habits by setting SMART savings goals. Next, create a line in your budget that allows you to set aside a certain amount each month. This should be the first bill you pay each paycheck. You’ll see your savings grow in a predictable manner once you get started.

You don’t save for your future

You may have a savings account and it is growing over time, but are you able to save enough money? Savings accounts are great for planning trips and big expenses such as a downpayment on a home or car. You also need to consider your future. Do you have a tendency to ignore your retirement? You don’t have to wait until you are 34 or 40 to start saving for your retirement.

How to stop this bad money behavior: Education and then action are the best ways to get out of it. Learn how your money can grow exponentially over the years by investing in retirement accounts. Next, you will need to start investing. This can be done in either a 401k, IRA or both. Make sure you take advantage of any employer match funds.

Buying too much too fast

Retailers are skilled at separating you and your hard-earned cash. Retailers and marketing companies use a variety of tricks to get your credit card out of your hands.

Keep in mind that it doesn’t really matter how much you save, no matter what the sales representative says. It doesn’t matter how much you spent. It doesn’t matter how much you spent. A $600 coat is only sensible if you have $600 to really spend.

Ignoring financial red flags

Management of money can be difficult. Neglecting financial documents or credit checks can cause you to overlook red flags such as incorrect entries on your credit reports, constant overdrafts, and important information about all the debts you have. It is better to tackle problems early than later, so you don’t end up in a heap of debt.

Impulse buying

Have you ever heard the joke about someone who goes to their local big-box store and leaves with a full shopping cart and $200 in credit card debt? You’re likely to have been the subject of this not-so-funny joke more than once due to your insatiable urge to impulse shop.

Impulse buying is not limited to big-box stores. While browsing social media, you might notice an advertisement and click on it. You end up spending $75 on shoes that were not on your radar. Impulse buying can lead to impulse purchases at the supermarket, where you might buy your favorite cookie brand. Impulsive buying can lead to excessive spending and even debt. It’s best not to do that.

You can do this by using the 24-hour rule. This means that if you feel tempted to buy something at once, wait 24 hours. If you feel that you still need the item after this time, then you should go ahead and buy it, provided that you have the funds. You might find that you can wait a while before you decide to buy some of these so-called must-haves.

Not comparison shopping

Have you ever stopped to look at which cereal brand gives the most bang for your buck? To be fair, overspending on cereal is probably equivalent to wasting $2. If you don’t comparison shop for larger purchases, it could lead to you spending more money and limiting your ability to save.

Although a single penny spent on cereal will not break your budget, it can add up if you overpay for essentials. It’s worth spending some time researching what you buy. GasBuddy is an app that helps you find the best gas stations in your area. You can also browse your local supermarket circulars to check which stores are selling your favorite items. A few dollars could save you a lot on your purchases.

Your boredom leads to spending

You may find yourself tempted to spend the evening on your phone, tablet, or laptop when the weather is cold. This could lead to you spending more than you can afford. Better options? You can also pledge not to shop online out of boredom and only shop online when you are looking for a particular item.

You can call a friend, or organize those photos from your childhood if you feel really bored. Don’t waste your time shopping or spending if there is something better.

Your credit card exceeding the max limit

Credit card debt is not ideal. Paying the minimum monthly payment is not ideal. This will lead to you being more in debt.

Late or missed payments on bills

It is bad money practice to not pay your bills on time. You could face a late fee depending on which bill you have. Or, you may be subject to a higher interest rate. If you don’t pay your bill within 30 days, it could cause credit scores to drop.

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