You know that moment mid-way through the month when you decide to check your bank account only to find you have pretty much zero money left? Yes, that. We’ve all been there. Most of the time it’s a real mystery too. You’re sure you hadn’t spent that much. Right? It could be that you’ve picked up some bad financial habits without actually realising. We’ve listed a few of the worst ones so you can shake them from your life and see your money go further.
Most of us have a habit of buying unnecessary items just because they’re on sale, which is one of the worst financial habits you can possess. If you don’t need it, don’t buy it and save the money for something you do actually need. Another example of add-ons is when your cell phone company calls you and gives you a deal which costs an extra ten Dirhams per month and gives you unlimited international phone calls. Obviously, you quickly renew your plan just because it sounds good…even though you never really make any international calls and use skype all the time because it’s even better than phone calls (and free).
Lifestyle inflation is basically when you gain extra money and instead of saving it or putting it into something you might need, you go and buy something to improve your lifestyle, even if it means it will make you fall into more debt. This is a bad financial habit which will eventually make you lose more money. Instead of upgrading your car from a Mercedes to a Lamborghini, start saving that money and then sit back and enjoy that amazing feeling of having savings in the bank. As simple as it may sound, always resist buying more than you can afford. Whenever you start feeling you’re going over budget to maintain a certain lifestyle, remind yourself you are on a slippery slope to debt and bad times.
Many of us tend to pretend we don’t have debts we need to pay off, then fall into more debt. The way to prevent that from happening is to start acknowledging the fact that you do need to pay it off as soon as you have money, and set a budget for it at the beginning of each month when you get your salary. Alarm bells should start ringing if you start dodging calls from creditors or collection agencies, ripping up the bills or statements before they’re opened. Get in the habit of always checking how much you owe, that way you can always prepare yourself for it.
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Incurring credit card interest
Credit cards are great, but only if you use them in the right way. No matter what reason you’re using your credit card for, letting yourself incur interest on whatever you’re buying is a big mistake. Credit cards can charge a great interest on your purchases, so basically when you carry a balance on your cards, you’re paying more money to the bank than what you have paid at the counter for your purchase. So unless you start paying your credit card regularly, you need to avoid using it too much.
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