The worst financial habits that are affecting you and your finances.
Most people choose to ignore these worst financial habits while other people may not have come to the realisation that their day to day habits with their money affects their finances negatively.
On moneyple.com we seek to help individuals to realise the simple ways they can make money, save money and manage money.
Most people are always interested in the making money aspects of life but may not really consider how they spend or manage their money or finances in general.
The act of managing money must be given the equal attention the act of making money does.
Not managing your money and finances come with its own benefits or advantages as well as its disadvantages.
Read more on the benefits of saving money
People generally keep repeating these money mistakes and it causes a negative impact on their finances.
People usually say that making money is taught in schools but saving money isn’t and that the main reason why people make the worst money mistakes is because of that.
This can however be a good reason why even the very intelligent people may at a point in their lives fall prey to such worst financial habits.
To be honest after most people fall prey to their worst money habits some of them are able to pick themselves up on that low point and make better finance and lifestyle decisions that would later impact positively on their lives.
The most common worst financial habits that may come to mind is probably credit card debt or debt in general.
But below are some of the worst financial habits that must be totally avoided.
Let’s take a look at the scenario where a student studies and lives in a big city such as London.
This student may have the dream of finishing uni and getting a high paying job that could earn him or her at least about £30,000 salary a year.
A £30,000 yearly salary is actually a good amount of money and a person who earns such an amount should be able to live a very comfortable life with such an income.
But this £30,000 yearly salary would only be possible after dedicating a couple of years in uni studying and making the grade.
But if you consider the amount of time and living expenses that was incurred whilst studying in the big city, a £30,000 a year salary must be well managed to live comfortably.
When some people begin to see such amounts of money, their money spending and managing habits do not reflect the amount of time and money they used to acquire their education.
For some people they believe they have a secured job that pays well so their spending habits must increase as well.
This is possible because if the worst should not happen, that job paying you £30,000 a year could even increase to £50,000 a year.
After such a person begins to see £50,000 yearly salary, their spending habits would further increase.
This could include holiday trips, expensive possessions and so on….
There’s absolutely nothing wrong with this.
But people will begin to showcase their worst money habits at this point in their lives.
For instance, such a person may now be seen driving a very ridiculously expensive car all because he or she has always wanted to drive such a car.
There is also nothing wrong with buying your dream car…
From our scenario the person keeps spending more money anytime his income increases and this is often referred to as Lifestyle inflation.
And this is mostly the reason people begin to increase their spending habits immediately they get an increase in their income.
Lifestyle Inflation itself could be the main culprit for why generally develop their worst financial habits.
People’s inability to control their spending when they make or earn more money leads to this lifestyle inflation and subsequently causes their worst money habits.
This lifestyle inflation can affect everything. This includes, where we shop, the types of clothes we wear, the type of restaurant we eat at, the types of gadgets we use and so many more.
There is absolutely nothing wrong with increasing and improving your lifestyle but this should not however affect how much we are able to save and invest at the end of each money.
With this type of financial habits, people can however get trapped or even addicted into this type of lifestyle.
For instance if the person in our scenario who is now earning £50,000 a year gets a car that cost close to that £50,000 or even above that that person would have more financial responsibilities to take care of in addition to their monthly costs of living.
Such a person would not even have enough money to take care of their monthly expenditure left alone have enough to save or invest.
People must however be able to reward themselves of their heart desires after working very hard.
but to avoid being trapped with our lifestyle inflation, we must avoid sudden increase in our spending.
By doing this you can totally avoid the number hidden worst money habits that continue to trap people.
Another toxic financial habits we must give up on is the habit of not valuing our time.
We must know that time can never be turned back no wonder people say time is money.
Some people even consider time as an asset which is more valuable than time.
If we are able to treat time as an asset we would be able to focus our attention on what is necessary.
Another one of the toxic financial habits we must give up on is to avoid making other people’s business our business.
We must avoid comparing ourselves to others .
Doing this could make you even lose focus on how you can grow your business or finances.
By giving up on these toxic financial habits, we would be able to give more attention to ourselves, our business and finances.
financial habits financial habits financial habits