Jul 30, 2018

5 Bad Financial Habits that prevent us to save money

Saving money has always been a thing we all aspire to but somehow, we all find ourselves not having the ability to do just that. Regardless how we aim to that, at the end of the month we all end up regretting not being able to save money and we hope that we will in the coming month. But that follows the same pattern. So how do we save money? The answer to that is that saving money need not be a separate thing and it is nothing other than curbing bad financial habits.

1. Spending more than you earn

This is often the worst enemy of your financial health and often can be traced to buying without proper planning or even thinking if you absolutely have a need for the things you purchase. If you constantly find that you are relying on your credit card for purchases that is indeed one sign you are spending than you earn.

Easiest way to solve this is make a list of expenses that you have to meet mandatorily. Your food costs, living expenses, travelling, housing and rent and etc. Once the basic list is completed calculate the remaining and straightway set aside a portion of that as saving, so even if you want to spend you will have already set aside your savings for the month.

In a case where you don’t have enough money to cover an unexpected cost or have come short due to an emergency turn towards a shorter time option such as a payday loan and pay it off quickly without accruing higher debts by relying on say a credit card which gives you the ability pay it forever but little by little run your interest cost way high.

2. Not tracking your expenses

Keep every bill, no matter how small or big. Think bus tickets, movie tickets, food bills. Write down any expenses that does not come with a bill. These maybe a tip you gave to a waiter, an additional 10 rupees you didn’t collect from a shop since they didn’t have change. Everything matters, track everything. If you want modern help, there are always various sorts of apps that allow you to track your expenses. But regardless of you do it, what matters is that you make it a habit to record each expense you incur.

3. Spending from your savings

Spending for expenses using what you have saved is something that you must avoid at all costs. Usually when you have no proper financial management, come the end of the month you don’t have enough money and the only source you can turn to becomes your savings. But understand that this isn’t a sustainable practice. Make sure the savings you put away are off limits. Perhaps put them in an account but don’t get an ATM card so it puts a barrier for easy withdrawal.

4. Not saving a portion of your salary

If you are dependent on a salary first thing right after you allocate for expenses is to put away money in a savings. Don’t put it off until after you make the expenses, do it the immediate day you get your salary so that you don’t run the risk of not having enough to save or even sustain. Also, if you have other income sources apart from salary consider having a portion of those allocated as well to your salary.

5. Making unnecessary expenses

You do need to live a comfortable life, after all that is why all of us work and earn. To enjoy life and be happy in our lives. But this does not mean that sometimes we do tend to make spending choices which actually does not contribute much.

Say for an example, you want to buy an expensive TV but you may only have time to watch TV for only half an hour. Despite it having the potential to improve your quality of life, it does not in a practical sense. So keep watch of these expenses and ensure that you don’t allow for making unnecessary expenses out of sheer want and always make choices based on needs.

Jul 30, 2018