Bad Financial Habits – Financial worries are amongst the most common worries affecting UK adults. This is particularly true in the aftermath of a once-in-a-generation economic crisis, which saw cost of goods and many services rise considerably against the average income.
Bad Financial Habits and How to Break Them
Though shrewd financial management is not necessarily a viable solution for many struggling to make ends meet, it is for a large majority of households in the UK – households who may be more cavalier than they would like with their weekly budget. Just as with any other kind of habit, financial habits are easily made and difficult to break. What, though, are the worst financial habits to cultivate, and how can you combat them decisively and effectively?
Overspending and Impulse Buying
This habit might seem to describe the vast majority of money management issues facing households in the UK, but can be isolated as a habit and controlled as such: overspending. Overspending is an easy thing to do where money is tight, but can often be avoided through controlling the sister habit to overspending: impulse buying.
Whether a last-minute chocolate bar at the off-license till or an impulsive four-figure eBay purchase, impulsive spending can be ruinous to your finances. The unpredictability of it makes planning for it difficult, and can make falling into debt extremely easy in the short term. One simple solution is to create a new current account, to use as a digital wallet of sorts; a set amount goes in, ensuring you can only buy items according to a pre-set budget.
Mismanaging Debt
Speaking of debt, debt mismanagement is another bad financial habit that can dramatically affect future prospects and financial milestones. Overspending and impulse buying aren’t the only ways to get into debt, but are actively detrimental to getting out of debt. If you become accustomed to certain expenditures, or a certain quality of life, it can be difficult to climb out from a place of high debt.
Moving debt around can be a good start, particularly if there are multiple debt sources at play. For one, consolidating debt with a secured loan means you can avail of lower interest rates, thought your house could be at risk of repossession if you fail to keep up with repayments thereafter.
Neglecting Emergency Savings
Debt and overspending are egregious financial issues, which can have untold consequences for quality of life and for security in later life – but even those with positive relationships with spending and saving can be guilty of bad financial habits. Emergency savings are essential for creating a buffer between you and unexpected costs, from car breakdowns to boiler failures.
Creating an emergency savings fund is as simple as squirreling away between three and six months of household expenses – more than enough to cover emergencies big and small. Building this up should be a priority, before contributing to longer-term savings repositories.
Debz Louise is a plus-size blogger based in Yorkshire. Behind many nationwide campaigns such as #WeaAreTheThey & winner of Best Blogger at the UK Plus Size Awards, she talkas about life as a plus-size 40-something woman in South Yorkshire.
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