Have you ever sat down and taken a look at how your handle your finances? There is a chance that you may have picked up a couple of financial bad habits over time.
It pays to look at the routines you’ve developed when handling your money, as you may find you are doing some things on autopilot without realising the impact it has on your bank balance.
It is never too late to break a bad financial habit. We’ve listed the top five bad financial habits (according to Banking Refunds poll of 1,000 workers), and ways you can break them below:
1 – Taking money out of savings
A staggering 40 per cent said they dip into their savings every month due to over-spending before payday. By taking money out your savings, you are delaying reaching a savings goal you have, whether that is to buy your first home, get a car, or savings towards your child’s future.
2- Not checking your bank balance for over a week
The research found that a total of 27 per cent of workers avoided checking their bank balances because they were fearful of what they would see. If you don’t regularly check the amount of money, you have you could be spending well above your means.
3 – Splashing out on pay day
Spending our money too quickly has also proven to be a bad habit for many, as 19 per cent admit to splashing out on pay day. The survey also found that 12 per cent of Brits said they felt their finances were out of control, while almost 20 per cent confessed to splurging on treats on payday rather than paying off bills. It’s important to spend some money on things you need but treating yourself on payday to unnecessary items can mean you won’t have enough money to pay for necessities for the rest of the month.
How to break bad habits 1, 2 and 3:
It is evident that many people are living above their means. To break these bad habits, there is one solution that can help you with all three.
At the end or beginning of each month, put a budget planner together for the following month. We have created a household budget planner and a budget planner for students too, to help you work out what needs to be spent on monthly bills, and how much money you will have leftover for “luxuries”.
Carefully think about each box before filling it in and make sure you have a little left over for any unexpected expenses.
Why not have a separate savings pot for a ‘rainy day’, this will cover things such as when you need work done on your car or for when you “just can’t leave that item of clothing on the sales rack”.
A monthly budget will help you to get over the fear of checking your bank balance as you will have organised your money so shouldn’t have anything to fear. A budget will also help you to make sure you don’t splash out on payday. Avoid splashing out on payday by including treats into your budget.
4 – Failing to check that a receipt is correct.
This habit is one that catches many of us out. According to the poll, 30 per cent fail to check a receipt is accurate and throw it away before even looking at it. After doing our grocery shopping or buying new items, if they haven’t updated the checkouts with the reduced item prices, we can get overcharged for items. This is why it is important always to check a receipt and look for discrepancies in pricing (when one price is stated on a shelf or price tag, but a different price comes up on the till) when you’re making a purchase.
How to break the habit:
: Discrepancies in pricing can be a bit of a grey area, as it depends on what the retailer’s policy is. Despite the rumours you may or may not have heard, shops do not have to honour the price on the ticket if it comes up differently (by law, anyway). However, many retailers will honour the price it says on the price tag as a matter of goodwill. So it is worth checking the receipt before you have left the store and checking the screen on the till so you can question the pricing before you pay for it or exit the store. You may also decide that you no longer want to purchase the item if the price is much higher than you expected.
5 – Leaving a letter from the bank unopened for over a week
Bills, bills, bills. We all dread them, some so-much-so that 20 per cent admitted to leaving a letter from the bank unopened for over a week. The research found that men were worst at ignoring bills, with 81 per cent confessing they regularly let bills build up. By comparison, just 53 per cent of women said they ignored bills and waited for final reminders.
How to break the habit:
Keep on top of your bills by paying them as soon as you have them otherwise you could forget about them and in turn have to pay extra charges, or worse. Services such as electric, gas, or your mobile phone may be turned off if you don’t pay bills. As previously mentioned, add any bills that need to be paid in your monthly budget. That way you will be prepared for them, and they won’t be as much of a surprise when they come through the letter box.
Remember, it’s never too late to break a bad financial habit. Take the time to sit down and review your finances often, and you will be better off in the long run.
