Everyone most likely has some sort of bad financial habit that they take part in. Now that my student loans are paid off, I have been evaluating the many other financial areas in our lives.
No one is perfect, and I definitely am not. I know that I share my weekly and monthly extra income all the time, but a bigger income does not mean that all financial worries are gone! This larger income has only been happening for less than one year, and before that we were very used to a relatively small amount of monthly income and living on a small budget.
Everything hasn’t been easy or peachy in our lives (long-time readers are well aware of this), but we have been focusing on being more positive.
So today’s post is important because not all personal finance bloggers are perfect with their finances, and I also need to be more realistic on my blog and share my downfalls as well 🙂 Hopefully you can learn from my mistakes!
I originally made this post and it was well over 2,000 words, so I decided to split it up. Be sure to look out for Part 2 in the next couple of weeks! Below is the list of bad financial habits you may be taking part in:
1. Paying yourself last is a bad money habit.
I’m guilty of not paying myself first. I should be designating a certain amount for savings, but I haven’t done that in a long time. Debt payments have definitely taken over, and before that, I still wasn’t paying myself first.
Before we started to aggressively attack my student loans, we were paying ourselves dead last. We would spend money throughout the month, and whatever leftover is what we would save. Big mistake!
2. Buying things that you don’t need
Everyone classifies “needs” and “wants” differently. When was the last time that you bought something that you didn’t need, and probably can’t afford? We definitely have things that we don’t “need.”
While I am fine with our purchases, every now and then it is hard to not sit back and really wonder if it is all worth it (i.e. our 2013 Camaro 2ss). Many people think that we are very stupid for getting this.
I do regret one car purchase 100%, and that was buying a Scion tC right out of high school, and buying it brand new. UGH! $400 car payments at the age of 18? I wouldn’t wish that on my worst enemy. It probably wouldn’t have been so bad if I lived at home, but I didn’t have that option. So along with $400 car payments, I was also paying for my own rental house, food, a new puppy (we still have her, no worries!) and so on. Our budget at 18 was much larger than what we were making.
However, I do think that money should be enjoyed as well. As I will talk about in August in Part 2, I don’t think you should let money control you. Money shouldn’t be a negative thing in your life. If you are good with your finances, why not enjoy some of your money as well? I am guilty of letting money run my life, and I will think about every little purchase and whether or not I am “worthy” of it.
We have also taken some pretty un-frugal vacations. I could have paid off my student loan debt so much quicker! However, I do not regret the vacations that we have taken.
3. Not knowing your true worth and feeling stuck
Are you stuck in a dead end job? May it’s a job you do not like? When was the last time that you asked for a raise? I am guilty of feeling stuck. While I am only 24, I have been feeling this way for quite some time (I’ve been working full-time for about 10 years now). It is hard for me to be more “free” and forget about my responsibilities, but I do have others who are counting on me.
I don’t have anyone that I can realistically rely on or turn to (yes, W counts, but I am thinking more in terms of parents and/or grandparents), and I do think this is why I have always been a worrier. If something did happen, I don’t have anyone that I can ask for “help” from, which then makes me choose the safer options in life. And then this leads to me feeling stuck.
However, my situation has also made me stronger, and without everything that has happened in my life I doubt I would be where I am.
4. Going without an emergency fund
Everyone has different opinions on this, but I do think that everyone should have some sort of emergency fund. Having too large of an EF can also be a downfall, and I know that because I waited so long to pay off my student loans, even though the cash was in the bank to do so.
5. Thinking that you will work forever and not need retirement
There are so many people out there who seem to not be worried about retirement. We haven’t started aggressively saving for retirement (we have a little, but we fell behind as we were more worried about student loan debt), but we do plan on changing this. Lots of young people think that they don’t need to start worrying about retirement until they are older, but why wait? What is stopping you from saving money right now?
You never know if something may happen. No one wants to think that the absolute worst will happen, but a medical issue may arise. Saving for retirement now can you help with something that may come up in the future that may prevent you from working.
6. Not taking a realistic look at your budget
Do you just throw in a guestimate for certain items in your budget? Such as food? We used to. We had an amount that we ideally wanted to spend. However, this is not the correct way to make a budget! This can also apply to your entertainment or fun budget.
We used to spend so much on food, and I still don’t like sharing the amount on my blog because I am ashamed of it. It was crazy! And such a waste.
Do you do any of the above? Do you have anything else to add to the list?