Last week, I talked about bad financial habits and how almost everyone has a weakness when it comes to personal finance.
I received a lot of really great comments in Part 1. Turns out that I’m not alone. So many people don’t budget correctly, don’t know their true worth (this was a main topic talked about in the comments), and so on.
And this is what is great about personal finance blogging, I love reading the comments and learning from others’ mistakes. And hopefully people can learn from my mistakes as well.
A lot of you said that you were looking forward to part 2 of this series. I’m glad everyone wants to read all about our financial mistakes. There are so many things that we probably shouldn’t have done, but how else would we learn?
No matter who you are, you either are currently committing bad financial habits, or you have in the past.
I don’t know of anyone who is perfect with their finances, so no one should feel completely horrible about themselves just because they are currently committing some of these financial habits or have in the past. The important part here is that you are changing for the better!
Below is the list of bad financial habits you may be taking part in:
Letting money control you
I am very guilty of this. Everyone knows this, and I probably have the label of “The Biggest Worrier in Personal Finance.” Letting money control me is a big part of my life that I do not like. I let money control me in that I think about money before I think about my health. I am working a ton of hours every week, when I should be thinking about my health and enjoying life.
I also calculate our financial goals all day long it seems like. I am always afraid that we will fall behind with a financial goal, and I will let it eat me alive. Fact is – we ARE doing good, so why do I let everything bother me so much?
Don’t worry, letting money control me will be a post all on it’s own. I have so much to say when it comes to this!
Turning down or ignoring benefits offered by your employer
Does your employer offer some sort of benefit in return for you working for them? This could be a company match, insurance, tuition, a gym membership, discounts at places you visit, and so on.
If they offer a match on a retirement account, I hope you are taking that! Maybe your employer offers cheap or free gym memberships and you’ve just been too lazy to sign up.
W used to work for UPS, and we went a good 2 or 3 years before we really looked at all of the benefits and discounts that UPS offered. They offered 20% off cell phone service for AT&T, and we didn’t know because we didn’t look! Make sure to look at all of the available benefits that are offered.
Paying extra for the same services
Do you ever catch yourself paying extra for the same service? This can be paying extra for late fees, paying extra to spread out expenses and so on. Paying late fees is almost never a good idea. Late fees can add up. If you can’t remember to pay a bill, try and mark it on your calendar so that you don’t forget!
Paying for over-withdrawals for your bank account can add up quickly too. If you make several $1 purchases and over-withdraw from your bank account, this could then add up to hundreds of dollars in bank fees.
A big one when it comes to this bad financial habit is paying extra on something such as car insurance so that you can pay monthly instead of every 6 months. I know many people who pay some of their bills monthly so that their expenses doesn’t seem as bad and they can spread it out over a certain amount of time.
This can apply to car insurance especially, as most of the time you have the option to pay monthly or every 6 months. If I pay every 6 months, I usually get a 5% to 10% discount. Who doesn’t want that? We used to pay monthly on many things because paying $100 per month seemed a lot less painful than paying $600 at one time.
Of course, if you are unsure of the service that you will be receiving, then maybe paying in bulk isn’t worthwhile. Do you bulk pay for certain expenses, or do you like to keep it on a month-to-month basis?
Being unaware of credit card facts
So many people seem to not understand credit cards to the full extent. I know of many people who do not know what a credit score consists of, and I also know of many people who do not realize that making only the minimum payment on a credit card is not the wisest choice. Many think that paying only a minimum payment is actually good, and don’t even know that they can pay extra.
Many people think that only paying the minimum will get them out of debt quickly. NO! What other credit card myths have you heard?