Having credit card debt or personal loans has become a natural habit for many of us – some people don’t even think about their credit card as “debt” but relying on it to get by from month to month is a bad habit that can damage your long-term financial situation. But like all bad habits it can be broken and your finances will be healthier for it. Credit cards are so common now that it is rare to find someone without one unless they have a poor credit history (or, indeed, no credit history at all if they are young and just starting their first job), but just because they are common doesn’t mean you need one. You might think card debt is somehow acceptable, certainly more so than, say, doorstep loans or other short-term loans but working to build up some savings is always a better option.
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money habits
It doesn’t seem to matter how much money a person earns, if they don’t work on developing effective money management skills, they can end up bankrupt. I was reading an article on Yahoo! that talked about seven professional athletes who squandered away their money on all kinds of gadgets and doodads rather than investing it wisely.
Although it may seem like it would be easier to manage your money if you had a lot of it, it’s obvious from reading the article that having more money isn’t the solution. Instead, what it takes is a disciplined approach; creating a budget, paying yourself first, controlling your spending, and most importantly, not spending more than you earn. Although people who make a lot of money may not have to be as strict with their spending, they still need to follow the basic principles of effective money management; otherwise they could end up like Scottie Pippen and Lenny Dykstra.
Before you can improve your financial circumstances, it’s important to understand whether you are a saver or a spender. Some people don’t even realize that they are actually fairly decent savers, while others don’t think they overspend when they actually do. Take this short quiz to discover whether you fall into the category of saver or spender.
If you are a spender, then you more than likely find great satisfaction in buying tangible things like cars, video game systems, and practically anything else that could be considered a gadget or gizmo. You would far prefer to spend your money than to save it. You like to buy products when they first come out on the market even if they are overpriced.
If you take a close look at your current lifestyle, there are likely one or two habits that you have developed that have cost you a lot of money over the years. My challenge to you is to work towards breaking those expensive habits this year so that you can use that money for bigger and better things such as saving for your future, doing some home renovations, or taking a much-needed vacation.
I’ve listed below just a few of the many expensive habits out there. I’m sure you could come up with more of your own that you need to challenge yourself to overcome.
1. Unused gym memberships – There’s certainly nothing wrong with paying for a gym membership if you actually go to the gym regularly and make good use of it. Unfortunately, however, a lot of people don’t use the gym enough to merit paying for a membership. If you’re one of those people, I recommend canceling your membership and getting exercise by some other method such as jogging with a friend or family member regularly.
2. Specialty coffees – If you find yourself stopping at Starbucks every morning for your favorite specialty coffee, consider buying the mix and making a cup at home. You can bring it to work in a mug or thermos for a fraction of the cost.
3. Buying lunch everyday – Rather than throwing away your hard-earned money day after day by buying lunch at your work cafeteria, get into the habit of bringing your own lunch to work using leftovers from the night before.
It’s great to save money, but what are you saving it for? Money is simply a means to an end. It helps you to achieve your goals, whatever they may be. But saving is almost impossible if you don’t have a goal for the money you are saving.
If you are currently having difficulty saving money, you need to ask yourself what your goals are. Do you want to travel, start a hobby, or buy a motorcycle? It’s important to define your goals. Once you have determined what you are saving for, it will make it so much easier to save.
It’s really hard for a person to save money for the sake of saving. What good is money if you don’t have a plan for it? It’s like buying a vehicle and then letting it sit in your garage untouched. The best way to ensure that you will be able to save is by determining what your goals are. It’s important to consider your short, medium, and long- term goals and then begin to tuck away money towards each of those goals.
Focus on your goals instead of focusing on how hard it will be to save up to reach your goals. By doing so, you will be motivated to live within your means and you will be less likely to overspend. As the saying goes, “keep your eyes on the prize.” Try it and see how it works for you. Saving doesn’t have to be a hard and frustrating task. It can be easy if you motivate yourself by setting targets that will enable you to achieve your goals and aspirations.