Have you ever vowed to yourself that you would never engage in a financial inappropriate behavior, only to find yourself doing just that? Things you learned from your parents that you vowed you’d never do are a good illustration.
Something as simple as screaming on the phone when the person on the other end could hear you perfectly if you dialed it down a notch, or something more serious like failing to break financial inappropriate behavior.
The same ones that led to some parents working for years and failing to properly plan for retirement. We establish habits in a variety of ways, and they influence our lives for the better or for the worse.
As a result, if you want to improve your financial situation, you must be intentional in breaking financial inappropriate behavior and replace them with positive ones.
I’ve included several bad money habits you should break right immediately, as well as some positive behaviors you may adopt to help you achieve your financial objectives faster.
Not having a plan in place in case of an emergency
To be honest, your emergency fund is a fantastic location to begin your savings strategy. We all know that incidents like Covid 19 happen all the time, costing individuals their jobs and causing wage cuts for countless more.
As a result, the best approach to be financially secure is to set aside money for unexpected expenses. This amount should be sufficient to cover at least three to six months of your monthly spending.
For instance, if your monthly expenses are N150,000, you should have at least N450,000 – N900,000 in your Emergency Fund. If you don’t have an emergency fund, you’ll almost always need outside assistance or loans if you run into financial difficulties.
Spending the same amount as you earn or more than you earn
If you spend as much as or more than you earn, you’re living paycheck to paycheck with no long-term financial strategy. This way of life makes it almost hard to save or accumulate considerable money over time.
Even if your salary isn’t much right now, spending every last penny is still considered a terrible financial habit. Spend no more than you make on costs – or, even worse, spend more than you earn by leading a lavish lifestyle. Reduce your spending so that you can at least have some cash on hand.
Putting off saving or investing till you “have more money”
You know how they say, “If you don’t learn to give N100, you’ll never be able to give N100,000”? The same is true when it comes to saving and investing. Do not wait until you “have enough” to begin saving and investing, since both will grow over time due to the power of compound interest.
Thankfully, you don’t need to be a financial guru to get started; Cowrywise can help you start your short and long-term savings and investment goals.
Having to rely on loans to cover your expenses
This is connected to those who spend more money than they make. Living within your means is critical since failing to do so may force you to rely on loans to meet your obligations. It must be aggravating to have to borrow money every month to pay bills.
To avoid this, you could severely reduce your spending, work strategically to raise your wage, or devise legal ways to supplement your income.
You’re not in charge of your revenue streams.
So many individuals are still “winging it” when it comes to producing regular money, with one month being a hit and the next being a fail. Instead of living like this, where your monthly income is uncertain, get a job that pays you every month or start a business that pays you monthly.
The amount you make in business may vary, but at least create something! The goal of every business is to generate money and profit, but if that isn’t occurring right now, you might consider leveraging your abilities to find a job that pays consistently. After that, you can become a full-time entrepreneur.
Always blaming others for your blunders
A mature person is one who is capable of taking full responsibility for their actions. We all make errors, but accountability distinguishes those who learn from those who do not. You may have made poor financial decisions in the past or are presently dealing with the consequences of one.
Instead of blaming someone else, think about it: “It was my parents’ refusal to teach me about financial independence,” “It was my foolish buddy who introduced me to this ponzi scam,” etc. Accept responsibility for your actions and retrace your ways.
Your parents could have taught you to develop good financial habits, but forgive them if they didn’t. Take the necessary steps to advance, and make sure you teach your children about money.
Your acquaintance who informed you about the Ponzi scam was right; it worked because you didn’t do your homework. If you had done your homework, you would have discovered that most companies that claim to “double” your money in a short period of time are a fraud.
The attitude of needing to cling to money for dear life smacks of desperation. Nothing indicates that keeping money in your bank account would make you wealthier. Develop an attitude that states, “I control what I do with money, not money controls me.”
Set money aside for leisure, and contribute to causes that important to you (no matter how small). These are just a few strategies to increase your sense of fulfillment.
Taking money out of your savings
You can’t develop riches if you constantly dipping into your savings as a tree can’t grow if it’s not irrigated. Your ability to acquire money will be harmed if you lack the discipline to save. Once you’ve started saving for a certain goal, don’t touch it until you’ve reached it.
Rinse and repeat as needed. You may set objectives for 3, 6, 9, or 12 months or more to keep you on track. That way, you’ll be able to concentrate and do far more than you ever thought.
Terrible money habits set you up for failure
There’s no polite way to phrase it, but bad money habits will lead to tears in the end. Let’s assume you’ve wanted to start an emergency fund for years but have never done so. You must have been burned in the past by this decision.
This is because life occurs, and when it does, cash will be spent in unanticipated ways. As a result, failing to build up an emergency fund, live within your budget, or continue to pay your bills with loans will put you in a vulnerable financial position and set you up for failure.
Do these things to get closer to your financial objectives faster. And here are some smart money habits to start doing right now.
- Create and stick to a budget
- Document your daily/weekly/monthly expenses so you can measure and tweak your money leaks.
- Pay yourself first by saving a portion of your income every month or every week (depending on how you earn)
- Save to invest, not save to spend
- Begin and stick to your savings and investment plans
- Pay off all your debt
- Diversify your investments
Breaking old financial inappropriate behavior and establishing new ones is a process that takes time. You may begin to adapt and acquire healthier financial behavior that will lead to financial success with dedication and the appropriate information.
Do you want to start your road to financial independence?
Are there any other financial inappropriate behavior you believe individuals should avoid? Please share your thoughts in the comments section. You never know who you’ll be able to assist.