Why do people get into bad financial habits?
Have you got you financial habits sorted out? Got your goals set and your rules in place? Are you sticking by them? If your answer is "no," then join the club. Some 84 percent of Australians, said they had not included any financial resolutions among their goals for the new year.If you spend all your money on your short-term goals, you are going to be out of luck on your long-term goals. Many people understand that but in the present time and day it is hard to resist bad financial habits.
Some people are scared of money, some people are gambling their money away, some people think they are too young or too old to start investing and saving, some people are spending more than they earn and some people, even though they are aware that they are in some deep "doo- doo", still don't seek help or advice!
Impulse buying is one main reason why people get into bad financial habits. Impulse buying is when someone buys something without giving much thought to whether they really need it. Sound familiar? Everyone spends money on unnecessary things but some people spend too much thus they get in a lot of trouble with their finances.
It is very important to manage your finances because there are many consequences that come from bad financial management.
Some people are scared of money, some people are gambling their money away, some people think they are too young or too old to start investing and saving, some people are spending more than they earn and some people, even though they are aware that they are in some deep "doo- doo", still don't seek help or advice!
Impulse buying is one main reason why people get into bad financial habits. Impulse buying is when someone buys something without giving much thought to whether they really need it. Sound familiar? Everyone spends money on unnecessary things but some people spend too much thus they get in a lot of trouble with their finances.
It is very important to manage your finances because there are many consequences that come from bad financial management.
Consequences of Bad Financial Habits
The consequence of bad financial management is eventually becoming BANKRUPT. Bankruptcy is one of the options available under the Bankruptcy Act to people who cannot pay their debts or cannot come to a satisfactory payment arrangement with the people they owe money to - their creditors. You will be listed as a bankrupt on a commercial credit reference record. This record is open to public search and your name will appear on it for 7 years from the moment your bankruptcy starts, even if your bankruptcy has been discharged since then. Lenders may limit your ability to borrow money or buy things on credit so you may find it hard to rent, or get electricity, water or the telephone connected without paying a bond; and some banks will not let you operate a bank account or will restrict how you use an account. You may find it hard to get or renew insurance. Job opportunities may also be affected by your bankruptcy. It is important to make sure you knock your financial habits dead as financial habits cause a lot of stress, nervousness, pressure and worry. In addition to that bad financial habits may not only be bad for you but also bad to society which is another reason why you must manage your finances.
Social consequences of Bad Financial Management
The one main social consequence of bad financial management is family and friend issues. If you burn down, as a result of your bad financial habits, the ones close to you will burn with you. They will be affected by your poor financial management choices. For example if you have a lot of debt you may not be able to provide for you families. This may lead to a fight with your partner which also affects your kids and friends. You will also be unable to buy stuff to cater for your family such as the dress for your daughters graduation, the new suit for mum and dads 50th anniversary and your the necklace for your wife's birthday. You will also be unable to buy presents for your friends at events such as birthdays, Easter feasts or even Christmas! As I said because you are gloomy as a result of your bad financial habits, your peers will be too. When you are upset at the party, your friend will be. This may also lead to a ruined friendship because people are more sad than happy when they are around you. They may also be scared that you are only there to ask for some money. As a result of the fights with your partner you may even end up with divorce papers. For these reasons it is important to combat bad financial habits! Let see how we can do those, shall we?
Combat those Bad Financial Habits!
Take a step back and analyze your finances. What's causing you the most trouble? Are you buried in debt? Is your savings account empty? Have you set up retirement accounts? Do you consistently make payments late?
Before you can address any of these problems, you have to recognize that they exist and are caused by the habits you want to change.
Disorganization costs money. Lots of money. Money spent on late fees, interest charges, memberships with groups you no longer associate, subscriptions to journals you no longer read, customer invoices that go unpaid, and warranties that never get filed. Don’t let your papers stack up, your invoices fall behind, or your payments arrive late as you will end up with a hideous beast of financial disorder!
Set up several separate bank accounts and label them with your goals (“ski trip” or “new furnace”). Research has shown that if you do this, you’re going to feel more guilty about dipping into that money, and you will save 30% more.
Saving for retirement overwhelms a lot of people. One rule of thumb is to save 12 times your salary. Others say, to be safe, save $1 million. Some people think there is no way they'll ever be able to save that much money, so they just give up. Bad idea. Just start saving what you can -- even if it’s only $50 a paycheck. How do you eat an elephant? One bite at a time.
Don’t buy anything impulsively. Any purchase over $200 has to be rethought , and you have to wait at least 24 hours to buy it. You will see that after going through this process, several items you almost purchased didn't seem so important to buy after all.
All of these things will help you battle your financial problems and prevent you from getting in any trouble. Always seek advice if you are having any big problems with your finances. It takes time, commitment and a strong desire to want to make the change so never give up home and you can make the change for sure.
Before you can address any of these problems, you have to recognize that they exist and are caused by the habits you want to change.
Disorganization costs money. Lots of money. Money spent on late fees, interest charges, memberships with groups you no longer associate, subscriptions to journals you no longer read, customer invoices that go unpaid, and warranties that never get filed. Don’t let your papers stack up, your invoices fall behind, or your payments arrive late as you will end up with a hideous beast of financial disorder!
Set up several separate bank accounts and label them with your goals (“ski trip” or “new furnace”). Research has shown that if you do this, you’re going to feel more guilty about dipping into that money, and you will save 30% more.
Saving for retirement overwhelms a lot of people. One rule of thumb is to save 12 times your salary. Others say, to be safe, save $1 million. Some people think there is no way they'll ever be able to save that much money, so they just give up. Bad idea. Just start saving what you can -- even if it’s only $50 a paycheck. How do you eat an elephant? One bite at a time.
Don’t buy anything impulsively. Any purchase over $200 has to be rethought , and you have to wait at least 24 hours to buy it. You will see that after going through this process, several items you almost purchased didn't seem so important to buy after all.
All of these things will help you battle your financial problems and prevent you from getting in any trouble. Always seek advice if you are having any big problems with your finances. It takes time, commitment and a strong desire to want to make the change so never give up home and you can make the change for sure.
