Four Bad Financial Habits That You Need to Break Stat

Most of us have bad habits that we tell ourselves we're going to stop. But it's hard to break patterns without making a conscious effort. So here are some bad financial habits to stop asap...with tips on how to be successful.

Nickel and Diming

You may be a perpetual 'nickel and dimer' if you hit the coffee shop on a regular basis, make impulse purchases from department or grocery stores, or buy a drink or snack each time you stop for gas.

To avoid these purchases causing you to spend too much, pay at the pump, make lists and stick to them, and set limits. Regarding the coffee shop, bring your coffee from home or if work offers it, drink it for free there. If you miss the fun flavors, buy yourself a flavored creamer and keep it at work.

Procrastinating on Saving

Do you tell yourself every month that you're going to set aside money in savings? But then something comes up that you want to do or buy and you end up either pulling that money from savings or never putting it in your savings account to begin with. This is pretty common as many Americans don't have enough in savings to cover even a $400 emergency.

So what to do? Make it automatic and forget about it. Set up automatic deposits at least monthly or each payday into a SEPARATE savings account. Make it difficult to withdraw money from savings so that you aren't tempted to use it for non-emergencies. I personally have an emergency savings account at a credit union, where I don't do my everyday banking. And again, remind yourself that that money is to be used ONLY for emergencies.

Not Planning Ahead

We all have those on-going expenses that we forget about until they come up. Whether it's Christmas presents, school clothes, vehicle tabs, or that annual vet bill, planning ahead is crucial.

Instead of waiting until it's time to pay, make a list of periodic expenses. Add them up and determine the annual cost. Then, divide by 12 and that is the amount you should set aside monthly for those periodic expenses. This is a much better than trying to pull together cash at the last minute.

Increasing Credit Card Balances

Sometimes it's difficult to not get caught up in the moment of an exciting purchase. However, when you charge something you can't pay in full, you're adding on another monthly payment to your budget. Plus, with interest you'll be paying more (sometimes MUCH more) than the original purchase price.

So if you have a credit card balance, focus on paying that off first before charging anything else. Then, make it a point to only charge something you can pay off right away. While you may not get that instant gratification of a purchase, just know that you're saving yourself a lot of money and stress in the long run and focus on that. If you can't afford it now, save up for it.

If you say that you can't afford to set aside money to save for a purchase, then you definitely would not be able to afford a credit card payment.

If you are looking to pay off your debt, contact LSS to see if a Debt Management Plan is right for you. The DMP can help you pay off your debt faster and save you money. Call us at 888.577.2227 or click to GET STARTED ONLINE now. Take action today!

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.