If you are overspending and not making a conscious effort to save money, then these bad money habits will surely bankrupt you. Here some bad money habits that you should fix quickly:
Bad money habit # 1: Keeping excessive credit cards
Keeping and using multiple credit cards means that it will be ten times harder to keep track of your spending. According to a financial planner, Claire Emory, money is always difficult to control when you have too many credit cards. In addition, Tom Quinn, a credit score specialist adds that an individual will receive fewer points in credit score rating if they have multiple credit cards with balance on them.
Bad money habit # 2: Not asking for a raise
Don’t be shy about asking for a raise from your boss. Research shows that women, in particular, compared to men, never ask for a raise. If you don’t ask for a raise then you will deprive yourself of a salary increase or some other incentive! A raise means that in the long run you will have more money for your retirement saving or for your children’s college savings. According to an economist who works in Carnegie Mellon, getting a raise even once can mean that you will benefit more than $500,000 over your lifetime.
Bad money habit # 3: Not keeping emergency funds
If tomorrow you lose your job, do you have any savings to survive on? Experts advise that you should have enough savings to last you for around six months of living expenses! So start keeping money aside for emergency and don’t spend it!
Bad money habit # 4: Not keeping track of your money
Many individuals might not have an extravagant lifestyle, but they overspend on little things, which lead to a zero account balance. If you don’t keep track of your money where you are spending it, you will never be able to save it. Keeping track of your cash flow will also make you more mindful about your purchases and spending habits.
Bad money habit # 5: Not having a disability insurance
Did you know that you are at a higher risk of becoming disabled than of dying before retirement? If you think, life insurance will help you with that, then you are delusional. Yes, disability insurance might be expensive, but it’s better to be safer than sorry. Ask your employer if they provide disability insurance, and you might get special and cheaper disability coverage. According to Bob Gertie, CEO, many organizations that have more than 20 employees provide long-term disability insurance that costs nothing to the employees.
Bad money habit # 6: Letting your spouse handle all the financial decisions
Just because you are bad with money that doesn’t mean you can’t learn. If your spouse is handling all the finance, then ask him or her to teach you too because two brains are better than one. Sometimes you might catch a big mistake in tax or investment that your spouse might have missed!