Bad Money Habits That Are Busting Your Budget
So you’ve decided that you’re sick and tired of being sick and tired. Your finances seem to always be in a mess and you run short every pay period, dipping into savings (if you’re lucky enough to have some), just to make it to the next payday. You’ve tried budgeting and for some reason, that just doesn’t seem to work for you. Therefore, in your mind, budgets just don’t work. They’re restrictive and a pain to do. But all the experts say you need a budget! What’s a person to do when week after week, paycheck after paycheck, you try and try, but every pay period, you go in the hole? Budgeting may not be working because you have some bad money habits that are busting your budget.
Obviously, a problem arises when your expenses (your outgo) exceeds your income. For many, this could be an income problem and they just don’t make enough money. For others, they have too many bills or…there are little expenses that don’t seem to be significant when we spend for them, but done often over a period of time, can wreak havoc on the ole budget. I call these bad money habits, “Budget Busters”. It could be a few dollars here and a few more there. Before you know it, you’ve spent enough for a car payment.
Some of these bad money habits can seem small and relatively harmless, but if this habit is keeping you from getting ahead financially, or if there’s more month left than money, you need to try to break these bad habits as soon as possible. Ben Franklin once said, “Small leaks sink great ships”! This is exactly what he was talking about.
*This post may contain affiliate links. For more information, see my disclosure page.
11 Bad Money Habits That are ruining your finances:
Here are some of the most obvious bad money habits (budget busters) and what you can do to try to stop these “leaks”.
Drive Thrus/Eating Out
This is a far too common problem for many people, these days and probably one of the most common of the bad money habits. It’s so convenient to swing through the drive thru and pick up dinner because your too tired to come home and cook after working all day. This can easily cost upwards of $20 or more, depending on the size of your family. Sometimes, it not just for dinner, either. If you’re running behind in the morning, you just grab something from McDonalds for breakfast or you swing through the Starbucks coffee line. That can be $5-$10, easily. That alone, can add up to $25-$50 per week, if done on a daily basis. ($100-$200/month)
Solution:
Meal plan!!! I can’t stress this enough. It’s your main line of defense when it comes to avoiding the take out trap or unplanned restaurant spending. Think about dinner a day ahead. Pull the crock pot out or do a little freezer cooking. It’s the only way you’re going to stop this potential leak. This one habit can single handedly blow your entire budget, if you’re not careful.
As far as Starbucks goes, make your own coffee at home. Most coffee makers are programmable to go off whenever you want them to. Sure, Starbucks is tasty, but is it really worth the money or the sacrifice of your financial well being? That’s for you to decide.
AMAZON PICK: Crockpot 8 quart with 16 oz Little Dipper Food Warmer
Emotional/Impulse Spending
Emotional spending is occurs when you buy something that you really don’t need or didn’t even know you wanted. It usually happens when you’re bored, stressed out, depressed or (un)happy…to name just a few. I guess you can say some people use shopping to medicate, for whatever the reason.
There’s nothing wrong with buying yourself something nice ever once in a while, but if you’re having problems with paying your bills because you’re spending more on non necessities, learning how to curb emotional spending is vital in order to decrease the damage that it can do to your wallet.
Solution:
If you have a problem with emotional spending, stay out of the stores as much as possible. Avoid temptation. Just because there’s a sale going on, it doesnt mean you have to go buy something. If you happen to find yourself there already and you see something that you think you have to have, make yourself wait for a period of time…say 24 hours. If you still think you can’t live without it, but you know you really can’t afford it, see if you can make yourself wait a little longer. Point is, try to separate yourself from it as much as possible. Usually, when we give ourself some time, we see that it really isn’t needed that much.
If you are bombarded with emails or catalogs, UNSUBCRIBE!
I was getting an email daily from Groopdeals. They have some great stuff and super deals. When I would open the email, I would always find something that would catch my eye. Because the prices were so good, I would easily talk myself into something. I have a few necklaces in my jewelry box that seemed like a good idea at the time, but now I look at them and ask myself, “What was I thinking???” Haven’t worn them yet! Either delete or unsubscribe completely and avoid the temptation!
**Update** There’s a great app for this call Unroll.me. It will clean your inbox up and you can unsubscribe or stay subscribed with the swipe of the finger. I was subscribed to sites that I know I had never subscribed to. It will help de clutter your inbox and decrease the temptation.
Too Much Debt
Well, duh! This will always be a bad money habit (or what I call a budget buster)! Anytime you have more going out than coming in, it just doesn’t work.
Solution:
The time is now for facing your financial situation. Do it sooner rather than later. Avoiding the problem will only make it bigger. It will never go away on it’s own. If you’re not doing a budget, START! If you’re using credit cards to get by, STOP! You’re just digging your hole deeper. Learn to live within your means.
Forgetting to Take Certain Bills Into Account
Have you ever had a bill come up that you might pay quarterly or bi annually? Homeowners insurance comes to mind here. Property taxes are another. If your property taxes are not escrowed or paid in your monthly mortgage payment, this can be a big one if not properly accounted for. School related expenses can also come up at the beginning of the school year. If not planned for, any of these expenses can and will sink your budget.
Solution:
I find that the easiest way to keep these (un)expected expenses from waylaying my budget is to get a calendar and start at the beginning of the year, going month by month, writing down any expenses that I can think of. Then I create a “sinking fund” for each item. It’s so much easier breaking down some of these expenses into monthly “bite size” portions than to have to come up with the money all at one time. Be sure to check your calendar often, so you’re aware of what’s coming up. It does no good to write it down if you never look at it.
Not Planning Ahead
There are certain things that come up, year after year, without fail, yet why do they always seem to sneak up on us. Christmas comes December 25th…every single year. Birthdays are the same way. We are gifted with the ability to have aforethought on these occasions. Why do we put these things off? Procrastination, maybe? Thinking we have plenty of time? Yet year after year, it’s the same thing. “Oh my gosh! It’s December and I have no money for Christmas! What do I do??”
Solution:
You know that calendar that I talked about above? Well, get it out and write down, month by month, the birthdays, special occasions and the holidays. If you start planning early…like January, it will help to keep your budget in tact. This is, again, the perfect opportunity to use the good old Sinking Fund. Just think…If you put up $20 a week, starting in January, by December 1st, that’s approximately $960 you would have saved for Christmas! That same $20 is what you can save by making your coffee at home, instead of going to Starbucks. Just saying…
Not Doing a Budget
Well, let me tell you…This is the king of the bad money habits! When you have no spending plan for your money, it will disappear so fast, it’ll make your head spin! When you finally sit down to do one, you’ll be amazed at the money your going to find. Most people who have never done a formal budget are usually flabbergasted at the amount of money that has been completely wasted, due to lack of awareness or carelessness.
Solution:
Do a budget!! A budget is a tool to help you devise a plan, so you know where your money is going and how you’re going to spend it. Without one, most peoples finances don’t fare too well. Simply put, budgeting is balancing your expenses with your income.
The best way to start budgeting is to start keeping track of your spending. Really be aware of where your hard earned money is going. Keep track of your grocery receipts, eating out receipts, Starbucks receipts…you get the idea. Any money going out, needs to be tracked and accounted for. Try doing this for at least one to two months. I promise you, it’ll be an eye opener. When you finally see the true picture, first you’ll be mad at yourself for wasting so much. Next, you’ll start thinking of your goals and where the money wasted would be better spent. Hopefully, this will get you into the “get out of debt and start saving for the future” mode.
Not Having An Emergency Fund
You’re playing Russian roulette with your finances when you have no emergency fund. This little savings account can be the difference between an inconvenience and a full blown disaster. It will seems like good old Murphy has moved into your spare bedroom when you least expect it and can least afford it. The emergency fund is insurance against that happening. It’ll keep you from putting one more thing on the credit card.
Solution:
Do whatever you have to do as quickly as possible, to get an emergency fund. Dave Ramsey has this as the number one baby step…before you do anything else. Start out with $1,000. It keeps Murphy at bay! If you’re trying to get out of debt, putting something else on credit is the last thing you want to do!
Sell what ever you don’t need or want, have the mother of all garage sales, get an extra job, work some overtime, put things on Craigslist! You get the idea. Do what ever it takes to get this fund in place as quickly as possible.
Not Shopping For the Best Prices
My Mom always says “Act in haste, repent in leisure” and I think that may definitely apply here. It seems kind of obvious, that it’s smart to shop around. This can really bust your budget if you don’t take a little time to do some comparison shopping. Never assume that one merchant always will have best prices.
Solution:
Take your time, if you can, and find the best price for whatever you’re looking for. We usually check retailers close to us firs,t for prices. Then, if we can wait a little while, we’ll get online and compare Amazon, Ebay, Overstock, Walmart and/or Craigslist. Just recently, our dentist advised my husband, that he needed to start using a Waterpik. He went to Walmart and found one for $59.97. Thinking that that was a little high, he came home without purchasing and got online. He found the same Waterpik at (of all places), Walmart.com for $10.00 less. He went back to the store and showed them the online price. Well, as Walmart does, they matched their own price! So, shop around!!
Paying for Cable/Satellite
Some of you may get mad at me for this, but this service can run way over $100 a month. How many channels can a person actually watch?? Have you ever really thought about it if you get your moneys worth? If you’re trying to dig out of debt or save, this expense is hard to justify.
related post: HOW TO DITCH CABLE AND SAVE MONEY
Solution:
Get an antennae. We stopped paying for satellite over 6 years ago and haven’t looked back. The picture is great with our antennae and we get many channels. We also use Netflix, mainly when the grand babies are here. Other options include Hulu, streaming from the computer and just watching pretty much what we want on the laptop.
Not DIY-ing
When you have to pay out for certain services, it can cost a bundle…thereby destroying your budget. There are so many things that we can do on our own. Some things just take a little learning.
Solution:
Before you pay someone to do something, see if you can do it yourself. My husband loves YouTube! So do I, for that matter. It’s our go to for learning anything. If we can’t find it on there or figure it out on our own, then we may consider hiring out. Pinterest is another great source for learning how to do things. We have learned so much from YouTube and Pinterest and really have saved a ton of money.
Not Using Cash
How does not using cash bust your budget, you ask? Well, it’s so much easier and much less painful when all you have to do is swipe a card. That goes for a debit card as well as a credit card. For some reason, parting with cash just hurts. It feels very different when you swipe as opposed to handing over the dollar bills. It has also been proven that when you pay with a credit card, you spend more. That benefit of buying now and paying later can lead to overspending. Swipe, sign and your done. You become desensitized, that is until the bill comes.
Solution:
If swiping your card, whether it be debit or credit, is leading to your budgeting demise, use cash as much as possible. When I do my budget, every two weeks, I go to my bank and take cash out for each of my categories. This is called the envelope system and it’s probably one of the best money habits you can develop.
I budget so much for groceries, eating out, household/yard, etc. I put the money in each category and when its gone, it’s gone. Sometimes, we just have to tell ourselves “No”. A budget is no good and will not work if you can’t stay within the limits that you have set for yourself.
AMAZON PICK: 12 Laminated Budget Envelopes
There’s hope!
If any or all of these habits apply to you, there’s is hope. By following the solutions, hopefully, you can get your budget on track and start making the most of your hard earned money. Like Dave Ramsey says, “Your income is your greatest wealth building tool.” Don’t let these leaks sink your financial ship.
Do you have any bad money habits that you have found to be busting your budget? I’d love to hear from you? PS…Be sure to subscribe to Love To Frugal so you don’t miss a post! You can also follow me on Pinterest, Facebook & Instagram for even more money saving tips!
