We all may have financial habits that may be restricting us from living a stable, balanced life but genius is knowing when to stop.
To break bad financial habits, consider how they make you feel. Most bad financial habits feels fun in the moment and creates remorse and regret, a few minutes or hours following the purchase.
Recognising these habits now could save a lot of money and stress later. Good financial habits might be a tough call at first, but they produce a lifetime of rewards.
Good financial habits can also help you earn rewards. Download the Wizely app and earn Cash Rewards of upto Rs 25 lakhs every week with Wizely Wednesday.
Not quite right, but did you know that good financial habits can help you earn rewards? Download the Wizely app and earn Mega Cash Rewards of upto Rs 25 lakhs every week with Wizely Wednesday.
Here's a list of 5 bad financial habits that you must stop immediately to improve your financial life.
1. Stop Making Unnecessary Purchases
Stop it right away! Spending on unnecessary items might be one of the major causes why you seem to be losing more money than required. Technology introduced us to online shopping making it convenient to shop at all times! But this also leads us to making impulsive financial decisions that impact our bank balances a lot!
2. Getting Caught in Debt Cycles
When you use credit cards to pay off other cards, and loans to pay off other loans, you're not paying off anything. You're just shuffling your debt around and incurring more debt each time you do so. So, when you use debt to pay off debt, you end up worse off than when you began. Using debt to "pay off" debt might be beneficial if you can transfer a balance from a high-interest rate credit card to one with a lower limit.
Transferring a balance once or twice to take advantage of a better rate is different from continually transferring balances to dodge credit card payments.
3. Not Saving!
Once you start earning, one of your main goals should always be to save a part of your income and put it aside as savings. Not saving today will definitely wreck havoc on your tomorrow and put you in financial danger. Your savings should ideally be in the forms of an emergency fund, a retirement fund and other goal-specific funds.
4. Spending Without a Budget
If you don’t have a monthly budget, you will run out of money even before you know it. If your expenses are always more than your income, then you’re always going to be spending money that you don’t have. Too many people live on more than they make and use credit cards to cover the difference. You can resolve this habit by reducing your expenses and relying only on your income to pay for your wants and needs.
Emphasis on needs. Be aware of your spending triggers and consciously avoid them. Remember, when you have a plan in place and know how to live on a budget, you’re ahead of the game.
5. Stop Falling for Lifestyle Inflation
The term refers to an increase in spending habits with an increase in an individual’s income. With extra cash in hand, it is a human trait to spend the extra money on materialistic things otherwise not required. One can be smart and make better use of the extra money by either investing the money or saving it for any future use.
Habits are hard to break, especially when it comes to your financial behaviour. However, anything that puts more money in your pocket is worth the effort! If you spend some time organising and managing your money wisely, you’ll reap the rewards soon after.
The better your financial habits, the more will be your Financial Wellness score on the Wizely app and the more rewards you are likely to earn every day with a chance to earn a mega bounty of up to Rs 25 lakhs every Wednesday!
Sounds awesome, right? Download the Wizely app and start earning financial rewards for good financial habits.
Also read: 5 Ways to Improve Your Financial Habits