Everyone has things in life they want to achieve. However, it’s easy to thwart our desires by following some foolish money habits. Reaching your goals is possible, but you must get out of your own way. Here are ten bad money habits to avoid when managing your finances.
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Paying Bank Fees
Why should the bank charge you to hold your money? Unfortunately, Americans pay upwards of $25 a month on fees.
That’s doing only one thing – making the bank rich, not you. Search for a fee-free bank to hold your cash. There are plenty to choose from that won’t nickel and dime you.
Subscribing to Cable TV
The average cable bill is $200 a month. Many people spend $300+ a month to get cable or satellite. If that’s you, it’s highly possible you’re wasting money.
It’s easier than ever to cut the cord on cable and save money. You won’t lose access to your favorite shows or live sports. And, you can pocket $50, $100, or more in monthly savings.
Having Ghost Subscriptions
When was the last time a subscription charge surprised you? If you forget you had the service, or haven’t used it in over a year, you’re throwing money away. Chase reports that nearly 70 percent of Americans waste $50 a month on subscriptions they don’t use.
Take ten minutes and go through your last few bank statements. If you see a service you’re paying for and not using, cancel it. That’s instant cash in your pocket.
Paying for Expensive Phone Plans
Legacy phone carriers get fat and happy on the myth you need loads of data for your phone. Thanks to no-contract phone carriers, you can get the data you need, at a fraction of the cost.
If you’re spending more than $30 a month for unlimited data, you’re only lining their pockets not yours.
Buying Extended Warranties
Retailers love to sell extended warranties. There’s one problem. It’s only a money-maker for them.
Often times the expense costs more than any potential repair, or the warranty won’t cover the problem. If you used a credit card for the purchase, many credit cards already offer an extended warranty for free.
You can also set aside some cash in your savings account to cover any potential repairs.
Carrying Unnecessary Insurance
You need insurance for everything from your auto to your life. Insurance is a necessity to protect what’s most valuable to you.
However, if you’ve not compared pricing in several years you’re likely leaving several hundred dollars annually on the table. Similar goes for life insurance. If you’re overpaying for permanent coverage you don’t need, you might be able to pocket significant savings without sacrificing coverage.
Avoiding Repaying Debt
Many people believe debt is simply a part of life. It doesn’t have to be that way. However, when you avoid making a plan to repay your debt it keeps you from achieving other financial goals.
Ignoring your debt is second only to mindlessly racking it up. It keeps you in the cycle of debt and accrues even more you have to repay.
Giving Into FOMO on Social Media
Smartphones and social media can be great tools to pass your time. While fine, companies know this and spend loads of ad dollars targeting you with tempting purchases.
Left unchecked this can eat into your budget. You can use apps that limit your time on social media platforms, you can also go cold turkey. Perhaps setting a budget for impulse purchases while on social media is a good way to have freedom, while keeping it in check.
Not Living on a Budget
Having a budget is key to knowing where your money goes every month. Many people believe that living on a budget means you can’t spend on things you want.
It’s quite the contrary. Budgeting gives freedom to spend on what you want, but doing so in accordance with your goals. If you’re new to budgeting, there are free apps you can use to help you start a plan for your money.
Buying Lottery Tickets
It’s fun to dream of winning the lottery. Unfortunately, studies show that a majority of people who play the lottery are in debt.
While not significant, the average American spends almost $250 a year on lottery tickets. However, many spend more than that. If that’s you, and you have debt, particularly consumer debt, it’s best to throw those funds at your indebtedness.
35 Proven Ways to Save Money Every Month
Many people believe it’s impossible to save money. Or, they think saving $20 or $50 a month won’t amount to much. Both are incorrect. There are many simple money-saving tips that can add up to big savings. You just have to start one, then another, to increase your savings.
How to Multiply Your Money
Get-rich-schemes are typically scams. However, there are ways to truly grow your wealth. While not flashy, they can help you build real wealth.
I Need Money Now!
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101 Ways to Make Money on the Side
There are countless side hustle ideas you can pursue. Not everyone will be a good fit for you. Here’s an exhaustive list of options to make extra money on the side.
7 Steps to Break the Paycheck-to-Paycheck Cycle
Making ends meet is hard on a limited income. However, it is possible to break the cycle and find financial stability. You just need to know where to start.
I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.