Friday, May 19, 2017

6 Habits That Can Be a Financial Disaster

It won’t be wrong to say that money is our lifeline. Without it, life cannot be enjoyed to the full. While doing all the luxuries, you need to save your money simultaneously. Savings is important to secure not only your future but also of your kids. Bad financial habits can put you in a risky situation eventually.

By saving, we don’t mean that you need to curtail all your wants. Just a little bit of change in your lifestyle can make huge difference.

Some of the bad habits surely can be avoided to help your finances from getting destroyed are as follows:

Careless Use of Credit Cards:

Having two to five credit cards in the wallet has become a common thing. However, it’s okay. But, if you’re using them irresponsibly, check your habit. It’s true that numerous credit card companies enable the users to earn lucrative awards by using cards. 

Yet you should know without making any profit, these companies aren’t going to give you a single buck. It means that common guys have to pay more interest than earning points from it.

There are chances of yours not belonging to the common class. Wait a second. Ask yourself- ‘Can I pay off the credit cards amount every month?’ Prior to using credit cards, determine whether you can afford to pay the monthly bills. 

Mostly, people frame their budget which they follow strictly to pay off credit card bills. Use credit card only when it’s necessary and not when you want it. 

Following Others’ Lifestyle Blindly:

Are you buying gold just because your neighbor did so few days ago?

Never let yourself to fall into comparison trap. It can have dire consequences. When you’re following the lifestyle of your friends and neighbors heedlessly, you’re ruining your income. You may have other necessities. Buying things to flaunt it to your friends may compel you to dig into the savings.

There’s no thumb rule that you have to cope up with your friends to get respect from them. Remember, you’re earning money to support yourself and your family. Hence, living with your means will be a prudent decision on your part. On the other hand, if you go on following others, you’ll start to take wrong financial decisions.

Spending Money on Cigarettes:

As per CDC’s view, “Use of tobacco is the single cause of death in the US that can be prevented.” Smoking not only kills a person slowly but also eats up his lifetime savings. As this process is quite slow, most of us neglect this harsh fact.

Let’s assume, you’re spending $4.5 daily on a single cigarette packet. And, if you’re buying two packs, the total cost stands to $9. Now, if you calculate it with 365 (number of days in a year), the overall expenditure becomes $3285. 

Isn’t the amount big? It is one of those bad financial habits that can be avoided. Moreover, if you’re a chain smoker, your insurance payment will be three times more than a non-smoker. Time has come when you should stop such bad habits. Kill it before it kills you.

Irregular Payment of Insurance Installments:

Insurances are useful. Paying the monthly installments may seem a burden to you initially. When you pay it regularly, you’re saving a lot for the coming years. However, there are many people who avoid paying the insurance installments on a regular basis. 

What they fail to realize is that if they don’t pay the installments monthly, then penalty charges will be incurred upon it making it a big amount.

Absence of sufficient insurance coverage may compel someone to use up his retirement account. Reviewing the coverage periodically is essential to make certain that you have insured all your assets properly.

Giving Info to Vendors:

Often visiting shopping sites may influence you to save your details with that specific vendor. Hundreds of them have easy shopping options. Shopaholics can purchase from these shopping sites with a single click. 

eware of such shopping options. They may make you bankrupt by offering lucrative things at discounted prices. These offering may be so irresistible that you won’t think twice before spending your cash on it.

Don’t allow the online stores to save your credit card info. If their catalogs and emails are tempting you to purchase immediately, skip signing up for it. Being a shopper, you may feel excited on hearing about a sale. However, it doesn’t mean that you should go for one.

Summing Up

Discipline is significant to get rid of the above-mentioned bad habits. Practice it again and again to get success quickly. If you can do it, you’ll find that you have saved quite a considerable sum at the end of every month which you can give you support during emergency situations.

Jennifer Cooper is a personal finance blogger and content writer. You can visit her personal finance blog at pro finance tips.

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