The current economy is full of challenges: inflation has reached historical records (and continues to grow), wages can’t keep up with the general rises on costs of living, and as if that were not enough, political instability increases our financial vulnerability.
But outside the macroeconomic factors lie our personal habits, which are more important when determining our financial situation: most of our money problems come from bad habits and poor financial control.
This year start with your finances under control and leave behind all the bad financial habits that stop you from growing.
#1 Spending more than you earn
Spending less than what you earn is the simplest condition to live without debt. Spending less than what you earn automatically makes saving a possibility. This January start budgeting; you know how much you earn so you’ll just have to adjust your expenses. Start by setting aside money just to cover all your basic expenses, reduce the amount of times you eat out or order in.
The first weekend will be the most difficult, but seeing your account with money at the end of the month will help you to stay determined.
#2 Borrowing money
Borrowing money implies getting out of your financial limits and make yourself vulnerable as you start depending third entities; and above all you have to pay for this additional responsibility. Financing is sometimes the only option available to make large purchases, but it shouldn’t be your go-to option to cover your impulsive buying. If you want something and you can’t afford it, don’t buy it; if you need something and can’t afford it, analyze your financing options, make budgets and payment plans (considering the interest costs) before you actually borrow.
#3 Making partial payments
Credit cards can be dangerous if you fall into the terrible habit of only making minimum payments. When you don’t pay your total debt, interests start growing fast and can make your debt huge and uncontrollable. Only making partial payments condemn you to a life in debt, so if you are planning to only making partial payments on your credit card purchases, better not use your card at all.
#4 Not saving
Not saving means that you are never going to have more money than what you earn; no big purchases, no backup plans, just financial stagnation. This year give saving a chance, even if it’s just to make saving a habit. Try automating your saving in your online bank, start with 5% of every paycheck you get. Automating your savings can help you make saving into a habit without even noticing.
Starting a better financial year is in your hands, you only need determination and the strength to get rid of bad habits. There are many financial and economic factors that we can’t control, but how we treat and manage the money we have is entirely up to us. This 2018 change your habits, improve your financial control and make a commitment with yourself, you can count on us for help. Join the Glass community and learn how to take your finances under control.
Drop these financial habits and raise your finances in 2018