2. Not Tracking Your Spending
Tracking what you spent your money on may not be fun, but it is important. If you use a credit card for most of your purchases, it can be even more tempting to not track your expenses until you have to pay your bills. However, the more you avoid tracking how much you spend the larger the shock will be when the bill comes due.
If you don’t pay attention to your spending habits, you may even find yourself in debt. Granted, going into debt for your mortgage or for car payments isn’t a bad thing, but credit card debt can be much harder to recover from.
3. Spending More Than You Make
This brings us to our next point, if you spend more money than you make, that’s a habit you need to break as soon as you can. Having a negative cash flow every month is a sure sign of unhealthy spending habits.
What gets a lot of people is making impulse purchases and subscription fees. Those small money leaks are what break a budget. These days with so many online start-up businesses, their marketing involves signing up for subscriptions to give you access to benefits.
Streaming services also stack up to the same amount as cable tv subscriptions!
4. Impulse Buying
Once again, if you’re not aware of how many impulse buys you make, it’s time to break that bad habit. Depending on what you like, these buys can range from large to small expenses. Maybe you have a busy schedule that makes eating regular meals difficult, so you often buy fast food.
Or maybe you have a collection you add to when you see a good deal. Or perhaps, you like to shop for something when you have a bad day. Or maybe you follow social media accounts that provide regular deals from affiliate links that you can’t resist.
Whatever the size of the impulse buys, be careful, because if you don’t pay attention to a spending habit like this, it can quickly get out of hand.
5. Not Keeping an Emergency Fund
Millions of Americans lost their jobs in 2020 due to the pandemic, which raised the unemployment rate to 14.80 percent in April 2020 according to Trading Economics. 2020 was also a year with a record number of natural disasters, from the fires in California, the tornados in Middle Tennessee, and the extremely active hurricane season. These disasters left more Americans out of work, homeless, and seeking refuge. Homes were lost and lives were displaced.
Remember that disasters can strike at any time, and when they do, your preparation will be put to the test.