We are just starting out in the New Year. It’s the time that we many of us make our new year’s resolutions.
If you are someone who has been making a financial mess of their lives, then you need to quit some bad financial habits this year.
Not sure what these bad financial habits are that are causing you so much trouble?
Make sure you add them to your new year’s resolutions and work on them to improve your financial standings this year.
1. Not Keeping an Emergency Fund
Are you guilty of not saving money for an emergency?
If yes, then the first thing you need to start doing this year is to start keeping some money aside for any and all emergencies. Have you ever faced a situation when you need an urgent $500 for a medical emergency or for repairing your car? Instead of borrowing money from someone on such occasions or selling something valuable to cover it, it is best to cut out a little on your usual expenses and save some money.
2. Not Budgeting
This is probably the biggest financial mistake you are making. You need to be intimately aware of and familiar with the inflow and outflow of your cash. If you are spending more than you are earning, you need to go back there and cut some expenses. Don’t consider the budget as your enemy. In fact, it is the North Star in many situations as it saves you from all the trouble that you may have to face later on due to some poor financial decisions.
3. Piling Up Credit Card Bills
Credit cards may be the way to go when you are out of cash, but you need to keep it in mind that it is a debt.
Do you pile up your credit card bills instead of paying them each month?
If yes, then you are making a big financial mistake.
If you have a huge credit card bill waiting to be cleared, do not spend any more money using credit cards this year until you have cleared all the bills. While we are not asking you to cancel your credit cards, we are just suggesting you take them out of your wallet. “What if I have an emergency?”, you ask? That is exactly why you have been saving money in your emergency fund!
Try your best to pay your credit card bills each month instead of piling them up to be cleared later.
4. Not Saying No
Are you what others consider the “Family ATM”?
Stop right there!
While we are not suggesting that you stop helping your friends and family in need, but you need to be more discerning when it comes to helping others. Stop bailing out irresponsible people. Stop financing the wishes of others. Stop rescuing others every single time when they are in financial trouble, otherwise how will they learn to take responsibility of themselves?
With these simple yet effective tips, you will be able to improve your finances this new year.