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We all have bad money habits (or have at least made some financial mistakes in the past). I’ve learned from a lot of my mistakes with money, and I’d like to share the 13 things that are probably keeping you broke.
1. You Eat Out Too Often
This is a common problem in many households, especially if you don’t particularly enjoy cooking.
Maybe you feel that you don’t have the time between work and school and kids and everything in between.
Go to your online banking, and pull up your checking account. Open a calculator in a new window or using your phone, and add up all of the times you ate at a restaurant or drive thru in the past 30 days.
If you know how much cash you’ve spent, go ahead and add it to your total.
At one point, when I was married to my ex-husband, we calculated that he was spending over $600 per month eating out at restaurants for breakfast and lunch everyday. The worst part is I had no clue how bad his bad money habits had gotten.
2. YOU’re Carrying Credit Card Balances
If you’re using credit cards to pay for things like groceries, fuel, prescriptions, or even emergencies, and you’re unable to pay the balance in full every month, you’re playing a dangerous game.
We all know how high interest rates can be on credit cards (up to 29% APR). More than likely, if you’re continuing to rack up credit card debt on everyday purchases, you’ve got a budget problem.
3. You Don’t Want to Budget
I’m gonna go out on a limb here and say that I believe most people understand basic budgeting principles. Money comes in (via income from a job or side hustle) and then money goes out (to pay for bills and miscellaneous expenses).
What I don’t understand is why so many people don’t want to budget. Is it because they are afraid to put the numbers down on paper? They don’t want to see the true, dire situation that they’ve put themselves in?
If you’re digging in your heels and fighting your partner (or your partner is fighting you), it’s time to get over yourself and get serious.
The awesome thing about budgeting is that the numbers never lie. They always tell the truth about what is truly happening.
And with knowledge comes the power to do something about it.
The first few budgets are going to be difficult. There may be some money arguments, and you might feel a variety of emotions from anxiety to relief and everything in between.
4. You’re Addicted to Spending
Are you a shopaholic? You might not even realize you have a spending problem, but it may be time to evaluate your bad money habits.
Signs You Might Have a Spending Addiction
- You hide purchases from your spouse
- You hide money from your spouse
- You have bank accounts or credit cards your spouse doesn’t know about
- You often make impulse purchases, defending your decision because it was on sale or because you had massive FOMO (fear of missing out)
5. You Don’t Shop Insurance Rates
If you aren’t shopping insurance rates with different brokers at least annually, you could be missing out on huge savings.
For example, my husband used to work for an insurance company, and while auto rates were hard to beat, our homeowners’ rates just kept increasing (even though we’ve never had a claim).
We thought because he worked for the company, we were getting a good deal, but when we shopped rates, we found a company that offered even better coverage at $500 per year savings.
6. You Have Too Much Car Debt
A good rule of thumb is to keep car debt to a total of no more than half of your annual salary.
So a married couple, whose combined income is $80,000 per year, should not own more than $40,000 worth of vehicles.
If you want to take it a step further to determine how much car you can afford, you can follow the 20/4/10 rule. I first heard of this from Whiteboard Finance’s YouTube Channel.
- 20% down payment
- 4 year max loan term
- payment should not exceed 10% of your gross monthly income
So let’s look at numbers for the couple above. Let’s assume that both the husband and wife earn $40,000 each per year.
Their gross monthly income is $3,333 each. If they each bought an $18,000 car and put 20% down ($3,600), they’d finance $14,400 at 6% APR for 48 months, and their payment would be $338 per month.
This is assuming all things are equal, and they are buying equal valued vehicles. When you add their vehicle values together, $18,000 * 2 = $36,000 (less than half of their annual income).
This is a great way to ensure you can afford a car before taking on payments. Never, ever finance for more than 48 months if at all possible.
Side Note: There are arguments for leasing, but I’ll leave that for another day. I’m sure there are plenty of car manufacturers or dealers who would love to write a sponsored post sharing the pros and cons of leasing, right? Let me know if so!
7. You Keep Up With the Joneses
Envy is one of those sins of which we are all guilty. We’ve all seen something we wish we could have.
But keeping up with the Joneses has severe consequences. Remember that the Joneses are probably knee-deep in debt and struggling to tread water.
Their “stuff” might look cool: the RZR’s, the boats, the campers, the vacations…but in most cases, these people are overextended.
Focus on the things that bring you joy instead. Take a vacation, but choose to stay airbnb or local vacation rentals within driving distance to save money.
Choose a used boat or camper as these “toys” depreciate even faster than cars. They are never a good investment. They’re a lot of fun, but you’ve got to make sure you can truly afford them before amassing huge amounts of debt.
8. You’re Still Paying for Cable
If you haven’t cut the cord yet, my question is, “Why not?!”.
We cut the cord years ago but were lured back to DirecTV for awhile (until our 2-year sweet, new customer deal expired).
DirecTV doesn’t care about loyal customers. They offer all of the deals to new customers and trap them in a 2 year agreement.
I have tried Sling TV and Hulu LIVE, but nothing beats YouTube TV, in my opinion.
I wish they offered affiliate programs because I would make bank referring people to YouTube TV!
You get local channels (without an antenna), most sports channels, movie channels, etc.
I love being able to login to my YouTube TV account in the car on road trips and watch my DVR (which offers unlimited recording).
YouTube TV is only $49.99 per month with no contract. It’s well worth it to switch from DirecTV, Dish, or other cable providers.
9. You and Your Spouse Keep Separate Finances
Let me preface this by saying that I believe that some couples should keep their finances separate.
Couples who married later in life and need to protect assets or an estate should probably keep their money separate.
But if you’re keeping finances separate because you’re emotionally attached to your money, and he’s attached to his money, that’s never a good arrangement.
10. You Frequently Change Jobs For No Good Reason
Can’t keep a job or get bored and move on too quickly? I know a few people like this. They struggle to settle down and commit to an employer for any length of time.
Every time you switch jobs (even if you get a slight pay increase), it costs you money. You might lose out on unpaid benefits, and there’s often a waiting period before you get that first paycheck.
If you aren’t moving up to advance your career, stay put. Hang tight. Do some soul searching and figure out exactly what it is you want to do.
A job-hoppy resume never did anyone any favors.
11. You’re Behind on Child Support Payments – The Worst of the Bad Money Habits
Look. I know things happen. But if you’re frequently late or behind on child support payments, this is one of the worst money habits you can have.
Child support feeds, clothes, and houses your children. Please take it very seriously and budget this first….before you feed yourself.
Kids always come first.
12. You Got Duped by an MLM Scheme
I’ve been there, done that. I used to be a Beachbody coach. I was a proud diamond coach until I realized that after a year of pouring my heart, soul, and thousands of dollars into the company, I didn’t earn a single dollar.
Everything I had earned had been reinvested back into the company.
You can read more about why I quit Beachbody coaching here.
13. You Don’t Price Compare or Use Coupons
Remember the Krazy Coupon Lady? Circa 2012, I was one of those crazy couponers. I’m ashamed to admit that we often skipped church and I actually made Sundays my shopping days.
I’d map out my grocery and drugstore shopping trips every Saturday for the next day, clipping coupons early Sunday morning.
You don’t have to become an extreme couponer to save money when shopping. A few ways I’ve incorporated saving into my shopping is that I:
- Sign up for a free Rakuten account for online shopping coupons
- Google whatever you’re purchasing + coupon code when shopping (ie Apostrophe skincare coupon code)
- Save on Playstation Plus and Xbox LIVE Gold memberships at CDKeys.com
- Ask for discounts on everything. You’ll get a lot of “No’s”, but you’ll get a few “Yes’s”
How Do I Change My Bad Money Habits?
You don’t have to be an extreme frugal living tightwad in order to save money. You just have to make small, consistent changes to your bad money habits in order to abolish them!
Start by creating a written budget and tracking all spending. Make good choices, and be honest with your partner about your financial situation.
By taking small steps, you’re less likely to relapse and overspend, and you’re more likely to have financial wins.
I’ve done all the things! Girl, I’ve washed my face. I’ve trashed everything that doesn’t spark joy. I’ve walked the baby steps. I’ve cried. I’ve prayed, but my perfectionism has really held me back.
Perfection Hangover can be crippling. Stop comparing yourself to others and start living your best life! That’s why PH exists! I want to encourage you to take control of your money, your blog, and your business.