Guest post today.
Are you determined to make a commitment to handle your finances better in 2014? If so, there are some easy things you can do this year to avoid financial problems and improve your money situation. These bad habits can trap you in financial stress and make it difficult for you to ever pull yourself out of debt. Below is a list of ten top bad money habits that you should avoid in 2014. Avoiding or breaking these bad money habits will help to alleviate your overall financial stress.
1. Buy Now and Pay Later
Many people tend to buy things on credit and then plan to pay it off later. Over the course of the year, these add up to a lot of interest payments. This is money that you could save or spend on other expenses.
2. Impulse Buying
Buying items on impulse is a problem that many people have. If you find yourself making purchases on a whim rather than thinking them through, you may have to take the temptation away. Remove the credit cards from your wallet so you will not be tempted to buy something you do not need. Spend a few days thinking about the purchase before making a final decision.
3. Dining Out
Do not fall into the trap of eating out too often. Even if you are spending your money at fast food restaurants, it will add up over time. Instead, plan your meals ahead of time and then you will be less likely to want to eat out.
4. Easy Loans
Under all circumstance, you should avoid turning to an easy or bad credit loan, such as payday loans or auto title loans, to help you out. While this may seem like a good solution at first, you will end up spending a lot more money than you initially borrowed. If you are having financial problems, check to see if there is any governmental help available to help you during this difficult time, or see if you are eligible to receive a loan from a bank.
5. Instant Credit Cards
It is always tempting to sign up for a credit card option when the retail store is offering you a certain percentage off your total. This may sound good at first, but another credit card in your pocket is not a good idea. While you may save some money at first, you will more than make up through in interest charges.
6. No Savings Plan
If you have neglected to set up an official savings plan to help you out in case of an emergency, this is the year to start. Have a set amount automatically go into your savings account every payday. Even a small amount will add up over time.
7. Ignoring Debt
While unpaid debt can be overwhelming, it is important that you face your debt and not simply ignore it. Ignoring your debt will only lead to further charges, increase what you owe and damage your credit more. Call those you owe money to and make arrangements to pay it back.
8. Automatic Deductions
Signing up for automatic deductions can be a good idea in some cases. Bills that remain consistent each month or utility bills can be a good idea to pay automatically because it eliminates the possibility of late payments. However, it is vital that you keep track of these bills and make sure all of the charges are correct. Signing up for other type of automatic deductions can be dangerous, especially if you do not keep track of it.
9. No Budget
There is no way to keep your finances in order without have a set budget in place. If you have never had a budget or have not used one for a while, now is a good time to start. Make broad spending categories and determine how much you have available to spend for each category.
10. Minimum Payments
Do not fall into the trap of only making minimum payments on your credit card bill each month. If you do this then you will only be paying mostly interest each month and it will take you a lot longer to pay off. Instead, pay off each month with the total amount you have available to pay.
Photo by ryanrocketship