6 Bad Financial Habits to Give Up This Month
Did you know that October is Financial Planning Month, which serves as a useful, annual checkpoint to make sure you are on track to meet your long-term financial goals.
Bad financial habits, though they seem inconsequential, create a burden on your financial health. Small changes can make a big impact on your future. Are you guilty of any of the following six habits? #FinancialPlanningMonth is a great time to take a look at where your money is going, or not going and make some changes.
BAD HABIT #1
NOT MATCHING YOUR EMPLOYERS CONTRIBUTION
This is one is easy...it's free money people! If you have a retirement account with your employer, there’s a pretty good chance your employer offers a match. What does that mean? They match what you put in, usually up to a certain percentage, in other words...free money. The catch, you don't contribute, they don't match. You're missing a huge opportunity here if you don't take advantage of this benefit.
BAD HABIT #2
NOT PLANNING YOUR MEALS AHEAD OF TIME
We're all guilty of this. You're running late for work and you don't pack your lunch or you have a thousand different places to be after work (meetings, school events, sporting events, etc...). Eating out is often the easy solution. But it can become an expensive habit. “I’ve got nothing at home” or “I don’t feel like cooking” quickly turns into a meal costing $15 to $20 or more per person. That doesn’t take long to add up or put a dent in your long-term financial planning goal. Take an hour or two over the weekend to plan your meals, make a list and hit the store!
BAD HABIT #3
NOT STICKING TO YOUR BUDGET
You’ve done the hard work of creating a written budget. You’ve listed all your expenses, recorded where every dime of your paycheck goes and set realistic goals. There’s just one problem – you’re having a hard time sticking to your plan.
You won't reach those goals if you don't put in the work. Being in control of where your money goes each month gives you a feeling of control and helps you plan for the future. No matter what your financial dream is, a budget is the first step toward getting there.
BAD HABIT #4
IGNORING YOUR CREDIT
At least once a year, you should review your credit report. Why? To look for evidence of identity theft and reporting errors. Imagine going to apply for a mortgage only to find that your credit score sank due to a bank reporting error. Visit Annual Credit Report to request your free report.
BAD HABIT #5
NOT HAVING AN EMERGENCY FUND
Your car breaks down, the washer goes up, you get sick and miss work, how are you going to pay for these if you're living paycheck to paycheck? A bump in the road could be catastrophic if you're not prepared. An emergency fund can help you stop adding to your debt with each bump in the road. It is easier to pay extra money on debt right away when you have a cushion for unexpected expenses.
BAD HABIT #6
NOT CREATING FINANCIAL GOALS
Setting short-term, mid-term, and long-term financial goals is an important step toward becoming financially secure. If you aren’t working toward anything specific, you’re likely to spend more than you should.
Financial advisors exist for the same reason that mechanics and doctors exist – people can’t expect to know how to do everything on their own. For advice on these or any other bad financial habits, don’t hesitate to reach out to us for help.