Habits are what propels you to engage in good behavior even when you don’t feel like it. Successful people rely on habits when they don’t have the motivation to do what needs to be done. It’s just part of their routine. Just as bad habits can be broken, good habits can be fostered.
Becoming debt-free is a worthy financial goal for anyone, and the first step is being aware of the habits that are sabotaging your wallet. A debt-free life gives you the flexibility to purchase the things you want while freeing up funds for emergencies. Certain spending habits keep people from becoming debt-free, however. Kick these three habits to the curb so you can enjoy financial freedom.
Impulse purchases and nonessential spending
Do you find yourself tempted by the magazines, gadgets, or candy at the checkout stand? What about trending fashion or the latest cellphone? Weighing your wants versus your needs can help you avoid impulse purchases. A good rule of thumb is to sleep on any unordinary purchases. If you still really want to buy the item, work it into your budget but at least give yourself time to mull it over. Chances are you’ll realize you’re just fine without it.
Like impulse purchases, shopping while you’re bored is also a bad habit. Pick up a hobby instead and delete the saved credit card information from your phone or computer. If you must pause to input it back in for a purchase, that should give you enough time to reconsider your choice.
Only paying the minimum required payment.
Credit card companies love making money off consumers who don’t pay their credit cards in full every month. Maybe you signed up for a credit card to reap the benefits of bonus points or extra cashback, but your spending got out of control. If you only pay your minimum payment, not only will it take much longer to get your balance to zero, but you’ll end up paying hundreds or even thousands of dollars in interest in the long run. This can damage your credit score and steer savings in the wrong direction.
Living outside your means
Spending more money than you make will keep you in the cycle of debt. It may seem obvious, but it’s quite common for consumers to dip into their savings, borrow from others, or use credit to continue to have a lifestyle outside their means. These habits will catch up to you, so reduce your spending habits immediately by creating and sticking to a budget. It can be difficult to get into the good habit of budgeting, but it’s attainable with self-discipline.