Let’s face it – we all have our guilty pleasures. Whether it’s a glass of wine on the couch each night after work, an iPhone addiction, sweet tooth, or something maybe a little more sinister – we’re all guilty of having some bad habits in life. As someone who has specialised in managing money and providing financial advice for the last 30 years, I’ve come across some absolute shockers in the money space. These toxic money habits, which you probably don’t even realise you have, can ultimately hinder you from achieving your biggest financial goals, keep you locked in and controlled by consumer debt, and cause you more and more stress through life.
#1 – Credit cards. Opinions have been split on these since inception and personally, I’m not really a fan. Having money that isn’t yours and is ‘free’ to spend can cause some (if not most) to go a little overboard on their spending. That pair of new shoes or holiday you’ve been longing for but just can’t quite afford? Easy – use a credit card! Well, not really. You’ll likely pay an insanely high amount of interest and end up worse off than you were prior. My advice – get out of consumer debt and ditch the credit card!
#2 – Buy now pay later. This has been a controversial topic since the rise of Afterpay, Zip Pay and the likes – blurring the regulatory lines between consumer credit and not. Just like credit cards, if you’re using BNPL it’s likely you can’t afford whatever you are buying in the first place. Rather than rack up a slew of late fees plus your 4-easy payments, delete the app and pull back on your spending. What you probably don’t realise is that lenders are now looking into your BNPL history to determine your eligibility for a home loan – don’t risk it.
#3 – Eating out all of the time. This is an obvious one based on two critical factors – it’s more expensive and its usually not as healthy as what you can whip up at home. We all have big days at work, get stressed or can’t be bothered to cook, however from a money perspective – eating out all of the time will crimp your ability to save and likely set you back from achieving your goals. Stay in (most of the time), cook yourself, and do it cheaply.
#4 – Impulse spending. We all need a little retail therapy from time to time, although the issue arises when this spending gets out of hand. Walking into a store and ‘going big’ on something you hadn’t budgeted for and likely don’t really need will provide you with your 5 seconds of instant gratification, although likely take you much further away from your goals. This is about being smart – do you really need something twice as expensive which does the exact same as the cheaper option? Probably not. Better yet, save the cash and read my next point.
#5 – Failing to invest. You simply cannot save your way to wealth. Building good habits by being smart with your spending, eating in, avoiding consumer debt and saving your dough are all great habits to master. The trick from here is to get that surplus money invested. Making your money work hard for you is how people get wealthy, whether it be in property, bonds, businesses, or shares. If you’re in the situation where you’ve got some cash saved up and you’re ready to start making it work for you, reach out to my team at Australian Investment Education at the following link to learn how: http://bit.ly/aie-mjb
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