Financial Habits to Avoid
When January 1st rolls around, we set new goals, with new intentions and what happens next?
Financially we set out to improve upon what we did or did not do last year, pay off our debts, buy our first home or just start putting money away for retirement. We have great intentions to be financially healthier, and like physical health our financial health can be affected by binging, carelessness, or simply not knowing what can cause harm. If you can break the harmful habits with discipline, success is just around the corner.
The “B” Word
A household without a budget is like going months without washing your hair. It may work for awhile, you may get compliments and – sooner or later – it just becomes tangled, may smell unbearable and ultimately just unworkable. Multiple small expenses and indulgences because of lack of will power can add up to big money over the course of a month or a year. Non-essential spending can be found in practically every household where those funds can be reallocated to other financial goals. A budget is a structure you put in place to tell yourself that you are ready to exercise some discipline to create change and have the nice things that are available to you.
Credit cards always seem to get picked on when discussing personal finances. They are like the “superstar” everyone wants when picking teams and then you realize they aren’t much of a team player without the proper guidance and coaching. With the right mentorship and discipline, payments towards your credit card debt will help reduce interest expenses and in turn provide you more discretionary income. Let’s also be direct here and put that mirror up, because the mirror always tell the truth when people won’t. The credit cards aren’t the problem, the users are. It can be your best friend or worst enemy.
No Family Time
It’s not how much you make, but what you do with what you make. That being said, no matter how much income you have, money can be a stressful topic in families. Talking about the family finances is often simply avoided. It’s something that many families know they ought to do, but feel ashamed if things aren’t going as they have planned. It’s easy to talk and plan for summer holidays, movie dates or who’s picking up the kids from school, but money conversations are often brushed off to the side.
Are you a “spender” and your partner a “saver”? Is it the opposite? Maybe the both of you are spenders or you’re both savers. Maybe someone’s a Diva and the other is a Hoarder - Take the Money Personality Quiz to find out. Awareness is the first step to change. Talking and listening about yourself and your significant other’s tendencies can be insightful and help avoid conflicts about your finances. Having an occasional chat about the budget may help keep your family on track with your goals – or help you identify new goals.
Now discussing financial matters when they aren’t working for you can be stressful and as a result you may be tempted to just completely ignore the subject. One day I’ll get to it, but “one day” isn’t a day on the calendar. Having a budget and a financial strategy in place sooner rather than later may actually help you reduce stress. Pick a day this week to start this conversion. See this as something that you check off your list. As you begin and start this process, you’ll begin to see your efforts make a difference.