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All of us have bad financial habits, right? I had some horrific financial habits in my 20s and even to this day I still have not cut some of those bad habits.
Are there bad financial habits that you are trying to quit?
Here are 6 bad financial habits to monitor and eventually quit
- Buying coffee, munchies, or lunch nearly ever day – this is a matter of laziness. I admit it. I am way too lazy to make lunch so ever since my 20s, I bought lunch. I do not drink coffee and my work has snacks so I do save money there, I guess. $5 here and $10 there really adds up, but I tell myself that buying lunch, actually enjoying the food, and saving time from making a crappy PB&J is worth the cost. That is what I tell myself anyway.
- Spending more than you can afford on housing (rent or buy) – even during my super money moron days in my 20s, the one thing I did right financially was not to spend more than I could afford on rent. I guess I figured early on that I could afford to default on my student loan debt and credit card debt, which I did on both, but getting evicted was not going to happen. Recently, I did try buying a house and failed. I am a big believer that things happen for a reason. It must have been a sign for me to take a step back from buying a house and focus on paying off my student loan debt.
- Eating out too often – I eat out nearly every day for lunch at work. Have been since my 20s. What a waste of money but as explained earlier in #1, I have convinced myself that it is worth the convenience cost. One thing I did change in my late 20s is to cook more. I used to go to the hot bar at Whole Foods every 2 days and that would be my breakfast and dinner including weekends. I do not like to cook because for me, the thought of spending an hour+ to eat food in 10 min is not worth it. I soon realized that cooking food is much healthier and cheaper. I once did budget paying for one of those ready made meal services, but that was even more expensive than going to Whole Foods.
- Bank fees, credit card fees – I think bank fees are the dumbest and biggest waste of money. If you are paying any type of bank fees such as overdraft fees, please look at alternatives. Consumers should never have to pay bank fees. Credit card fees such as overlimit fees and late fees are a big waste of money. I have worked in the financial services industry so I am very familiar with how banks make money and these fees are a big reason why banks are profitable. One credit card fee that I have justified is annual fees. My top of wallet card has a $450 annual fee; however I did the math to justify this seemingly insane annual fee. In this specific case, I get a $300 travel credit along with getting reimbursed for Global Entry. The $150 annual fee is offset by the amount of money I spend on the card and the extra points I get from redeeming for travel. The math made sense so I have had the card for 2+ years now.
- Spending because of your impulse, entitlement, boredom, or a sale – I am doing a lot better these days ever since I started budgeting earlier this year (2018). My biggest trap is Black Friday when some of my favorite high end fashion designer brands go on a small “sale”. Black Friday 2018 will be the first time ever in my past 10 Black Fridays that I will be aware of my spending and budget. I would start with a list and stick to my budget.
- Paying a premium for convenience – I definitely do this when buying lunch and not making it at home. This one is debatable for many though. Paying for convenience such as paying someone to clean your house could save you hours that you can make back by working on your side hustle or enhancing your skills.