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Breaking Bad Financial Habits Made Easy

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Most people have a few bad financial habits that they would love to break, if only they knew they existed. That’s actually the way things are for so many people, because many of us simply do not know we have these adverse financial habits that affect us negatively and prevent us from realising our true financial potential.

Whether your bad financial habit is hitting the credit cards a day or two before payday or failing to keep tabs on your automated bills because over time you’ve become somewhat disconnected from your finances, it’s possible to break these bad habits once and for all, get on top of your financial situation, and look at the future in an entirely different light. Many people have and you can too. It’s actually very simple and straightforward.

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What’s the problem?

Do you know what your bad financial habit is or how many you have? Chances are you don’t realise just how many bad financial habits you’re guilty of, though you can surely think of one or two that affect your finances negatively which you would like to break.

To give you an idea of what a bad financial habit is – this might help you realise what yours are – here are ten of the top bad financial habits according to the top Google results for ‘bad financial habits’. There are loads – far more than most would expect.

  1. Not budgeting
  2. Not distinguishing needs from wants
  3. Lifestyle inflation
  4. Making excuses or placing blame
  5. Thinking you’re too young or too old to plan for the future
  6. Not understanding how credit scores work and/or not making the effort to improve your score
  7. Living beyond your means
  8. Not paying off more than the minimum on credit cards
  9. Not creating an emergency fund
  10. Using credit cards when you should be using a debit card or cash

Bearing in mind that the ten bad financial habits above are just the top ten, how many are you guilty of? And did you even realise they were considered a bad financial habit in the first place?

Identifying bad financial habits is the first step to rectifying them. When you know that you have a bad habit you can work on fixing it, but you have to really want to change your behaviour and that isn’t always easy. We can’t simply want to do something because we know it will be beneficial for our financial situation. Or can we?

Write it down

Once you have identified your bad financial habits the first thing you should do is write them all down. But not just anywhere, get a notepad or something similar and use it only for your finances. Nothing else. This will help you to visualise your financial behaviour and that empowers you to make real changes that will see you putting your money to better use. There’s a lot to be said for ‘putting things in writing’. Doesn’t it make you feel more accountable to yourself and those dependent upon you?

Take on one or two habits at a time

You can’t, generally speaking, break all your bad financial habits at once. As that’s so, set yourself realistic goals and take on one, perhaps two, bad financial habits that you would like to break, conquer those and then move on to the next.

When you have created a list of the financial habits you know you need to break, work through them and cross off a bad habit or two at a time, it will make you feel like you’re making real progress with your financial situation. And you are. It won’t happen straight away, but you will make it through that list and the rewards for doing so are well-worth the effort.

Taking on one or two bad habits at a time is a great way to get your finances on track because you’re setting yourself goals and breaking those goals down into manageable pieces that you can really make progress on. The feeling of making progress can be a very powerful and empowering feeling, one that can have the effect of making you feel much more confident about yourself and your future.

Understand that there will be setbacks

There’s no such thing as smooth sailing where personal finances are concerned and the sooner you accept that, the sooner you’ll start to make real progress – the reality of the situation is that you can’t see what’s around the corner or just over the horizon.

So, whilst you may have been making real progress by, for example, eliminating debt, chances are that something will occur that could make you question the progress you have made and perhaps even make you doubt your ability to break your bad financial habits. Bear in mind that everyone experiences setbacks but it’s what we do to get back on track that defines our chances of success in the future.

Automate good financial habits

Screenshot of the direct debit mandate

A good point that’s frequently made in many online articles concerned with breaking bad financial habits is ‘automating good financial habits’. Like meeting your payday loan repayment commitments on time by setting up an automatic transfer so that the loan repayment amount is automatically deducted the day you get paid. This is a great way to ensure you never miss a loan repayment and that can help you to improve your credit rating in the process.

You could do the same with financial investments, for example, setting up a separate savings account like an ISA and automatically transfer a certain amount of your salary every week into this account so as to put something aside for the future.

Everyone has bad financial habits they need to break. Identifying the bad habits you’re guilty of making and doing something constructive about them is the first step to taking a firm hold of your financial situation and looking to the future with confidence.

About the author

David Griffin David Griffin trained as a graphic designer and now helps PaydayLoan123 with social media. He is a born and bred Londoner who has recently moved out of the capital and is probably missing it a little too much. He enjoys fishing, playing golf and working out at the gym, when he feels energetic enough!

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