Building good financial habits is essential for an abundance of reasons, not the least being that it helps you to provide security and a decent quality of life for yourself and your family.
Yet far too often people fall prey to the same bad money habits that set them astray from this track.
Learn to identify the common bad money habits you possess and the tools to break them, once and for all.
According to credit reporting agency Experian, in 2019, Americans spent almost $18,000 to buy nonessential items, such as dining out or getting food delivery to their home, getting coffee to-go or buying the hottest new fashion item in the trendiest new catalog.
The more you spend on nonessential items, the less money you have available for essential items like paying the rent or mortgage, buying groceries, paying down credit card debt or student loans and preparing for retirement.
Ask yourself how many of the following types of poor spending decisions you may be prone to making:
Experian reported that, as of May 2020, Americans held around $5,300 in credit card debt, on average.
The problems that failing to reign in credit card debt and spending can cause for a person's life are vast and widespread and include:
Similar to making irresponsible use of credit is making irresponsible use of debt.
Credit and debt are, after all, two sides of the same coin.
Every day, it seems, your inboxes and mailboxes alike are overflowing with loan offers.
Borrowing money for things you can't currently afford only puts you into deeper debt, however, making you more unable to afford even basic necessities.
Speaking of borrowing, to borrow a timeless saying and scientific principle, the only constant is change.
That is, the only thing you can count on is the unexpected, yet one of the most common bad money habits is failing to prepare for that entirely predictable event.
You may not know what form that unexpected event will take, but you certainly know that it's immanent.
So, why not take steps here and now to protect yourself from whatever curveballs life invariably throws you next?
Yes, this is almost identical to the previous bad habit, but an emergency fund is so important it merits its own line item and list number.
Emergencies are those life and death situations for which being unprepared can alter your life forever.
Having no emergency fund is how people who suddenly and unexpected lose their jobs subsequently lose their homes.
It's how people who get stricken with a sudden health condition progress far worse, perhaps even permanently or mortally, because they didn't have the funds to care for it properly and in time.
The solution to this problem is obvious: start an emergency fund. Then, once it's started, make regular contributions to it.
One way to ensure you do this is to set up automatic contributions from your credit union account, perhaps after each pay period.
Every late fee you pay is money wasted. Moreover, anytime you pay a bill late, you run the risk of facing a rate increase from the given vendor or creditor and of getting another negative mark on your credit.
As mentioned frequently throughout this list, simply knowing where your money must go and where it's coming from can help you tremendously to structure your life in a way that's most rewarding to you.
Responsibility for your financial condition falls squarely on your shoulders alone. There is nothing to be gained from blaming anyone else.
It will not improve your financial situation.
Only taking full accountability for where you are and how you got there will show you the way out.
The best way to start a new habit is to simply start it, here and now, without delay, as if it's always been the way you've lived your life.
Spend and save wisely, and you'll soon start reaping the rewards that help compel you to continue behaving financially responsible moving forward.
If you live in the Jacksonville, Florida area and want help setting up a new savings or checking account, managing your credit and debt or otherwise improving your money habits and financial situation, speak with one of our friendly and knowledgeable financial experts at 121 Financial Credit Union.