Breaking bad habits can be extremely hard, especially when it comes to spending habits. These bad habits can be difficult to break if you don’t even realize you’re doing them; so take a look at the suggestions below and analyze your own personal situation to see if you can improve in any of these areas:
Emotional spending
Using shopping to deal with life’s ups and downs is common, Gretchen Cliburn, CFP, director of financial planning at BKD Wealth Advisors, says. But emotional impulse spending doesn’t actually fix anything. In fact, it tends to make things worse, she says. That temporary high you get from buying will inevitably wear off, often leaving you with credit card debt or piles of unneeded stuff.
To avoid making impulsive, emotional purchases, set some ground rules for yourself. For instance, buy items only from a wish list that you’ve made at a time of relative calm, not when you’re trying to distract yourself from anxiety or sadness. Or make yourself wait 24 hours before giving in to an unplanned purchase.
It’s also a good idea to opt out of emails from your favorite stores to reduce temptation, and to buy things only when you can pay cash. If necessary, find someone to discuss your goals with and to hold you accountable, Cliburn says.
Comparing your money situation to other people’s
© Deklofenak
Spending all your income
Depending on credit cards
JohanSwanepoel
By the end of 2015, Americans’ credit card debt reached about $900 billion, according to CardHub’s analysis of Federal Reserve figures. Contrary to popular belief, carrying a balance on your credit card can lower your credit score, even if you make payments on time. And if you’re making only the minimum payments each month, your credit score will keep suffering because your credit report will show unpaid balances every month.
Plus, when you make just the minimum payment it takes years to pay off your debt. Factor in interest and you’re paying way more than the initial sticker price for those purchases.
If you’ve become accustomed to living with credit card debt, take some time to understand exactly what you’re doing with your money. Read the fine print on your next credit card statement — particularly the section that shows how much you’ll end up paying if you simply pay the minimum payment every month. You may be shocked to see how expensive credit really is.
To break the cycle, stop using credit cards immediately. Set a strict budget and use the snowball method to strategically pay off your debts. If you need help, consider contacting the National Foundation for Credit Counseling, a nonprofit group that specializes in helping people get out of debt.
Original Source:http://www.businessinsider.com/7-toxic-money-habits-you-should-quit-2016-1
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