In about one year, I will have graduated from my Masters of Divinity program. At that point, I will begin working in my chosen career field and building a financial future for myself. In recognizing that early retirement is one of my goals, I know that I must begin eliminating bad money habits that will preclude me from attaining my objective. If building a financial future is a goal that you have for yourself also, consider whether you’re currently engaging in any of the following bad money habits:
1. Not Putting Enough In Your Emergency Savings.
If you were to quit your job or be fired tomorrow, having enough money in your savings to sustain you would be important. In thinking about your current savings account, how long would that money last you in the event that you were terminated. One month? Two months? In discussing bad money habits, financial planner Ted Toal notes that having an emergency fund is mandatory. Ideally, you should have enough money in your savings or money market account to cover at least three to six months of your living expenses.
2. Not Tracking The Money You Spend.
In discussing bad money habits, financial planner Wendy Weaver notes that not knowing where your money’s going will preclude you from meeting your spending and saving goals. For this reason, it is critical that you pay attention to your cash flow while being mindful of the purchases you make. If you are not accustomed to tracking the money you spend, there are several ways to help you start. Personally, I am in the habit of checking my bank account online every morning to ensure that everything is in order. You can also try an online resource such as Mint.com to track your daily expenditures. Another way to keep track of your spending habits is to request and keep your receipts.
3. Using A Ton Of Credit Cards.
Using a lot of credit cards is a bad money habit for several reasons, including the fact that it makes it difficult for you to keep track of where all your money is going. Oftentimes spending a few dollars here and a few dollars there entails confusion and frustration at the end of the month when you realize you owe more than you thought. Additionally, using multiple credit cards is a factor that can harm your credit score. In light of this information, it would be advantageous for you to have just one or two cards with a great cash-back program and no annual fee.
If you are attempting to build financial wealth for yourself, you should know that bad money habits can and will preclude you from doing so. In examining the list above, you should take the time to consider whether or not you’re engaging in any of these undesirable behaviors. If you are, be sure to start breaking your bad money habits so that your financial future will be secure. Good luck! :)
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