It’s pretty simple. If you want to save money (or reach whatever financial goal you have), you need to keep your spending in check. Bad spending habits can hurt you down the line, if you don’t take control of them. While controlling your spending may seem hard, the good news is that it’s completely in your control. You have the power to spend or not spend.
If you think you struggle with overspending, you’re not alone. According to SWNS Digital, “Between eating out, paying for cable and streaming services, receiving subscription boxes and other superfluous spending, the average American spends $1,497 per month on non-essential items, according to new research.”
That means just about $1500 a month is spent on things people don’t need. If we look at it from an annual view, that’s $18,000! I could think of quite a few things you can do with $18,000! If you’re ready to start changing your spending habits, you’ll want to start with this list. I’m sharing 10 bad spending habits that will hurt you down the line.
10 Bad Spending Habits that will Hurt You Down the Line
#1 – Spending money before you make it
I’m not just talking about having a plan for your money when it comes in. I’m talking about you actually spending money you don’t have, with the intention of paying yourself back. You could spend on credit cards, a personal loan or take from your savings.
This is a dangerous game. It just takes one unexpected expense to come up and before you know it, you aren’t able to pay yourself back. This can put you further behind and could make it harder and harder for you to catch back up.
#2 – Small, daily indulgences
We’re all guilty of indulging ourselves every now and then. However, when those indulgences happen on a consistent basis, it can lead to big problems with your budget. Small, daily indulgences seem harmless because the cost isn’t anything to worry about. On the contrary, that small, seemingly harmless cost will add up when spent every day.
Don’t let small indulgences get the best of you. Sure, you are worth the things you want, but wouldn’t you rather be in the position to afford big indulgences? Controlling your spending now will help you make that happen.
#3 – Impulse purchases
Just like small, daily indulgences can add up, so can impulse purchases. When you spend money on impulse, you aren’t in control. Your emotions are in control. Impulse purchases are never a good idea and usually mean there are bigger spending problems at bay.
#4 – Using a credit card that carries a balance
Never use a credit card that has a balance carried over from month to month. This leads to you paying more in interest and running the risk of falling behind. The only exception is when you have 0% interest for a given timeframe. Be careful with that though, because the time frame usually comes faster than expected.
If you have credit card debt, you shouldn’t be using your credit cards. Spending money you don’t have, thus requiring you to use credit cards) is never a good idea.
#5 – Buying things you don’t need or use
You can convince yourself that everything you buy has a purpose, but if you aren’t using the things you buy, then you’re spending money you shouldn’t. Buying things you don’t need or use is usually a result of wanting to spend money just because. This bad spending habit can keep your accounts smaller than they should be.
#6 – Putting big purchases on credit
Some big purchases can’t be bought without credit. Things like houses and cars are excluded from this habit. I’m referring to big purchases that could (and should) have been saved for. For example, if you know you are moving into a new place, you should be saving for furniture. You shouldn’t have to charge the furniture purchase on credit. You want to get into the habit of saving for big purchases and using cash to buy them.
#7 – Applying for store credit cards for the discount
My 21-year-old self was guilty of this habit. The store cashier is so convincing with that 15% additional discount! The thing is, you aren’t really saving 15% off your purchase. You’re actually spending an extra 10-12% because you put it on credit and were charged interest!
Store credit cards shouldn’t be opened just for the discount. The amount you pay in interest is usually more than the discount anyways. Be smart with the credit accounts you open. Too many open accounts too fast can hurt your credit score.
#8 – Letting FOMO rule
FOMO is the fear of missing out. If your friends are going on a lavish vacation, it doesn’t mean you have to go! Easier said than done, I know. Letting FOMO dictate your spending is a habit you need to break. There will always be things that sound great to do but don’t help your situation.
Think of FOMO as like a second form of “keeping up with the Joneses”. You don’t want to be the person taking a vacation, only to come back home and not be able to pay rent. Trust me, I’ve been there and it’s not worth it. You can check out my money story to learn more.
#9 – Saying “yes” when you shouldn’t
Saying “yes” to spending money you shouldn’t spend is a bad money habit. Whether you feel guilty and want to help a friend, or can’t turn down another baby shower; saying “yes” when you shouldn’t is a recipe for budget failure.
Women aren’t always good at saying “no”, but that doesn’t mean we shouldn’t try! The next time someone asks to borrow money, or you can’t afford to purchase a gift, say “no” with grace. You won’t lose any friends because you said no. If you do, they weren’t true friends anyways.
#10 – Making excuses
Making excuses for your bad spending habits keeps you stuck in the same cycle. You have to take responsibility for your financial decisions and turn things around. No more excuses! If you’re spending money you shouldn’t be, OWN IT! Once you take ownership, start making changes to fix it.
If you’re struggling to allocate your income properly, schedule a free consultation with me now and let’s work through it together!
Related: 7 Bad Habits Making You Broke
There are certain bad spending habits that can hurt your future self, and your future bank account! When you are aware of these bad habits, you can start recognizing them and working to break them. We all have things we can improve on, so take ownership and start improving. Are you guilty of any of the habits on this list? How did you break your bad spending habits? Share your experiences and tips by posting a comment below