Indeed old habits die hard and when it comes to your money habits, the earlier you drop the habits, the better it is for your financial stability and well being.
If you’ve got those bad money habits, we sincerely don’t expect things to change for the better overnight. However, with a bit of persistence and hard work, you’ll eventually overcome those awful habits that constantly stand in your way. Before we get right to it, let us answer one very pertinent question.
Can Bad Money Habits Set You Up For Failure?
The answer is yes because no matter how much money comes your way, your financial goals will remain unachievable. This is why if you need to overcome them.
If you constantly keep spending money without a thought to any long term implication of those bad habits on your ability to be financially stable, it might very well end in tears. Now, it’s time to dive into those bad money habits that you need to identify and bring to an end.
Impulsive Spending
Are you the kind of person who has formed the habit of buying things that you never planned to buy? If you are, then we have taken up the responsibility of letting you know that this is a bad money habit.
Over a period of time, this habit will leave you constantly broke and unable to achieve your financial goals. The weird thing about impulsive spending is that while it might give you happiness at first but has no true long term value. When you take a closer look at the things you buy impulsively, you will come to realise they were unnecessary.
The earlier you break up with this habit, the better it is for your financial stability.
Taking Expensive Loans
According to Nwakaego Ifeajuna, a Credit Control & Customer Care Analyst at Money in Minutes Finance Company, you can’t simply grab the first loan option that comes your way.
If you’re going to borrow money, you need to do it wisely. When you want to borrow money, you must realise that you have several options to select from. Each of the options available to you comes with its own terms and requirements.
– Nwakaego Ifeajuna
We know that before you take a loan, the temptation of taking the first loan that comes your way is real but you need to avoid making a decision you will regret much later.
Always keep an eye on the interest are regardless of how much you need that money. For instance, if you needed a salary advance loan, which of these options below would you go for?
- A salary advance loan with a 16% interest
- A salary advance loan with 0% interest and a 5% markup fee
The choice is yours but as Nwakaego put it, look before you leap. When you’re considering a loan option, go for a quick and affordable loan.
Spending to Impress
To be honest, it’s pretty easy to get caught up in the web of buying things to impress others. You should, however, realise that spending money to give your status a lift does not get you any real friends. Worse still, it is a recipe for financial instability.
For instance, what’s the point of buying a car you can’t maintain just to impress your friends and colleagues. This is a bad money habit and the earlier you start being yourself, the better for you. Always ask yourself honest questions before you commit yourself to that thing you have your eyes on.
Unable to Say No
Nigerians are known for their socially vibrant lifestyle and this can sometimes encroach on your finances. Let’s look at the example below:
You earn N100,000 monthly. A friend of yours is getting married and informs you that the cost of the “Aso Ebi” (fabric chosen for the ceremony) is N80,000. What would you do?
No matter how much you like that friend of yours, you should be able to let him/her know that you cannot afford it. Despite the glaring implication of making such a commitment, many still find themselves unable to say “no” and this is where the problem kicks in.
The psychological cost of never saying no is huge. It often comes at a higher cost than you are willing to accept. One of the many things it does is that it triggers bad money habits as evident in the example above. It also takes you farther and farther away from achieving your personal financial goals.
Not Repaying Your Loan
Paying back a loan is just as important as taking it and we’ll tell you why. Defaulting on a personal loan can have serious consequences for you from a financial standpoint. Unpaid loans end up accruing additional interest and you’ll end up hurting your finances.
However, that’s not all. Unpaid debts do your credit score more harm than good. You end up getting your reputation tainted with harassing phone calls from debt collectors.
Final Thoughts on Bad Money Habits You Need to Drop
We know it’s your money but too many people spend money they earned buying things they don’t want to impress people that they don’t like. This is a loop you should avoid getting caught in, which is why we have shared these bad money habits with you.
Ensure you focus on the bigger picture at all times and don’t get carried away by that momentary feeling of satisfaction.
Are there other bad money habits you think we left out? Feel free to let us know.