It is very simple to give way to your desires in order to have more in the highly consumerist society that we live in. We are constantly bombarded with ads telling us how problematic our lives are and how we need to purchase the latest product or service to resolve them. However, the biggest impact of this is on your finances. If you are not careful, you could land yourself in serious debt.
The following are some of the many bad spending habits that can cost you a substantial amount of money.
Spending without a budget
Some confuse budget as a limitation on their ability to spend on anything that is of value to them in the hope of collecting enough money for their retirement fund. However, this does not necessarily have to be the case. Although the main objective of the budget is for you to ensure you save money by the end of the month, it should also cover some expenses that can help you with instant gratification.
You do not necessarily have to buy out an entire furniture set; however, you could consider eating out at a restaurant if it is once a month. Those who do not make any budget considerations can easily fall into the trap of their temptations.
Using a credit card instead of cash
Carrying a credit card is undoubtedly convenient. But, the fact of the matter is that if you are using your credit card to pay for groceries every week, it could be costing you too much without realizing. The benefit of using credit now and pay later can grow into debts that have to be paid along with interest. As a result, you will end up paying more than the initial amount.
A credit card may be good for one-off purchases, but if you are using it regularly, it can be very easy to lose track of your payments.
Do you find yourself going to the market to buy for an item and later find that you have bought multiple bags of clothing and electronic items? Impulse buying can perhaps be the single most destructive habit that can drain your wealth. It is important that you are aware of your emotions when you go shopping so that you don’t get swayed by the bright red point of sale item labels on discounts.
Remind yourself that you are only going to buy what you need and not what you want. This can help you avoid overspending on trivial things.
Not getting your financial statements
Not many of us have the habit of reviewing their bank statements every month. Failure to keep track of our spending means that there could be a significant amount of money leaving our accounts every month in the form of standing orders and direct debits. Perhaps you have made a direct debit for a period of 12 or more months and have forgotten to leave enough money in your account.
This can be a grave mistake to make considering that such payments are taken out of your bank without any reminders and failure to have enough in the account means that you could be required to pay a penalty.