Spending Habits That Make You Look Broke

At some point in your life or even now you have had at least one bad spending habit. My bad spending habits started in college when I was approved for my first credit card. This type of behavior leads to unnecessary debt and can lead to financial crises such as bad credit, collections, judgments or wage garnishments. 

These habits can be inherited from parents, relatives, siblings or friends. These habits usually start or are implanted in your subconscious as a child and stay with you throughout adulthood.

Determine where the bad spending habits started. Stop these bad habits now will save you time, money and stress in the future.  

Examples of bad spending habits are: overspending or spending more than you earn, impulse or emotional shopping, using payday loans or check-caused stores, using money orders instead of writing checks or using online banking; talking about your purchases and the cost.  Here are x way to stop bad spending habits that make you look poor. 

RECORD SPENDING HABITS

To stop bad spending habits write down your daily spending on paper and pen, Word or Excel or use a smartphone app. Assess your spending each week to determine areas where you can reduce spending.

Create a budget to track spending or use a budget app. Create realistic financial goals to help you stay on track with your spending. Go on a 30 day spending fast. Stop charging and buy only basic necessities.

Use voice recording, set alerts or reminders when bills are due and any other tasks to help you eliminate your bad spending habits. Seek professional therapy to help change your mindset.

DO RESEARCH

Comparison shop to obtain at least 3 price quotes to find the best deal. Search online and on social medial sites for discounts and specials. Sign up for email or text alerts. Use comparison sites like Amazon, Bizrate and Price Grabber or smartphone apps like BuyVia or RedLaser.

SET REMINDERS

Sign up for email or text alerts about coupons, discounts or specials on item your regularly purchase. Use cash back or rewards points earned to make purchases.

PAY LESS

You no longer have to pay full price for any item. You can comparison shop, ask for price matching or negotiate to obtain a lower price.  Reduce temptation when shopping and leave your debit card or check card at home.

How to Protect Your Money From the New Tax Code

Many people know they should track their spending and create a budget or spending plan but don’t want to.  The thought of knowing how much money you actually owe, how much money you earn and how much money you actually spend each month is terrifying.  If you create a budget you will quickly see how you spend your money.  You won’t be able to hide it or run from it any longer.  If you know, other people may know too, yes those other people are your creditors who continue to call asking for a payment. Learn more at http://tiny.cc/kbnmpy

Many people are fearful of creating a budget and have good intentions by creating one but don’t stick to it.  To stick to creating a budget you have to view a budget as a tool to help you.  You are the only one who has to see your budget.  Many people today live paycheck to paycheck and are in mounds of debt, in some cases because they didn’t create a budget or didn’t stick to it.

If you know how much you earn, how much money you owe and how much money you spend you can change the direction of your life.  A budget helps you if you have an unexpected expense and when an economic change occurs such as tax code change. In 2017 the country experienced several fires, hurricanes, floods and earthquakes some in areas that were not expected.  If you did not have homeowner’s insurance to cover the damages that is example of unexpected expense. 

Create a budget by writing down everything you spend money on each week or during each month and subtract your income.  If the result is less than 10% of your monthly income you need to make some adjustments to your spending.  A balanced budget consists of: 15% transportation, 15% debt, 10% savings, 35% housing and 25% other expenses. 

Create an emergency fund to cover your total monthly expenses for 9-12 months.  Creating a budget will help you to reduce spending and prevent you from using credit cards to pay for purchases.  Use credit cards for emergencies only.

Develop financial goals when creating your budget. Financial goals provide motivation for you to work towards reaching that goal and provides a sense of accomplishment when the goal is met. Some examples of financial goals are: pay off a credit card, buy a home, start a business, take a vacation, etc.  Here are 6 ways to create a budget and stick to it.

1. Take accountability. Take accountability for your actions, don’t blame others for your current situation.  Learn how to be flexible and adjust to changes in your life.
2. Use pen and paper, use a software tool like Quicken or Microsoft Money or use the envelope method.  Once you visually see where you are spending your money it will make it easier to reduce spending.
3. Create goals. Write down a list of at least 5 financial goals. If you cannot achieve any or can only achieve 1 or 2 of your financial goals you need to make some changes in your spending habits. Write down a list of all of your debts.  Develop an action plan and beside each debt write down steps on how you can pay the debt off: reduce spending, use coupons, use money savings tips, earn extra income, etc.
4. Pay off small bills first. Pay down any small bills and debt first.  Once all your small bills have been paid off start tackling the larger bills. Setup payment plans for bills you cannot pay off in full. Be sure the account balances are updated on your credit report.
5. Support network. Surround yourself with at least three people who are doing better financially and gain financial advice from them.
6. Seek professional help. Consult a financial coach, financial planner or advisor to help you create a budget or spending plan and provide recommendations to help you stay on track.

Get more tips at http://tiny.cc/kbnmpy

What Your Wallet Reveals About Your Spending Habits

                                                      

Many Americans carry a wallet however according to Bankrate.com 80% carry less than $50 in cash daily.  Approximately 50% carry $20, and 7% carry more than $100.  Did you know that the type of wallet you carry and how you organize it describes how you manage your money and your life? 

An old worn or torn wallet may show that your wallet is used to serve the purpose of holding your money and don’t believe a lot of money should be spent on wallet.  If your wallet is organized neatly it shows that you organize your money and your finances as well as your life.

If you keep everything in your wallet including receipts from 5 years ago like George from Seinfeld that may show that you are not organized with your money, your finances or your life.  Carrying a designer wallet may show that you value image and appearance.

If you never have cash or never have enough cash that is a red flag that you need to adjust your spending habits quickly to prevent a financial crisis such as filing for bankruptcy, foreclosure, judgment, or tax lien.

If you have money in your wallet but never know how much you have you also don’t know how much you spend.  This is a red flag that you need to create a budget.  I always keep track of how much I spend down to the penny.

If you find money in several places in your home or car that is a red flag that you are not responsible with your money.  If you don’t manage the money you have now when you have the ability to earn more you will not be able to manage it which will result in bigger financial problems.

If you have more than one credit card in your wallet that is too many.  Carrying several credit cards in your wallet is very tempting and will cause you to spend money you don’t have or don’t need to spend.  I only carry my credit card when I know I am going to make a purchase. It is best to carry a debit card or cash. This reduces your chances of identity theft.

Not knowing how much money you have can lead to bad money habits such as frequently using your credit card, bouncing checks or overdrawing on your checking account.  This can also carry over to other financial accounts such as your savings, retirements, college savings account, etc.

It takes 23 days to break a habit.  If you think about how you spend your money every day or how you manage it, you will be able to break the bad financial habits and become a better shopper, spender and will eventually become a role model for your family and friends.

The first step to managing your money is knowing how much you have and keeping it in a safe place such as a bank account.

My wallet is ten years old and I don’t plan on buying a new one anytime soon. It only matches one of my purses but I don’t care.  I will keep carrying it until it can no longer serve the purpose of carrying my money.  Until then, I will continue to be unmatched.