5 Toxic Money Habits You Should Ditch In 2021
Managing your personal finances, or “adulting” as the millennials call it, is tricky. The typical American has so much responsibility—rent, bills, student loans, credit card debt, mortgage loans—that aiming for financial stability seems an impossibility. However, it’s not entirely impossible to change up your financial status. Achieve your financial goals by ditching these five toxic money habits and a little boost from Access Loans.
Not Tracking Your Expenses
More than not having a budget, not tracking your expenses, leads to terrible spending habits. You don’t know where your money goes so you may end up coming up short come due dates, or you might find yourself maxing out your credit cards. Tracking your expenses shows you your spending habits and what you need to change so you can start developing healthier money habits.
Relying On Your Credit Card Too Much
Credit card drives you toward spending more than you can afford. You need to keep in mind that whatever you put in your credit card costs more because of the interest rate. If you find yourself paying only the minimum amount for your credit cards, that is bad news. This means you’re already living beyond your means, so your debt is piling up. Try to keep your credit utilization rate at 30% or lower. This will not only curb your shopping habits but will also keep your credit score in check.
Lack Of Financial Goals
Simply saying that you want to be financially stable is not enough. It’s an abstract goal that could mean anything. If this is your only goal, then no wonder you’re wandering around with bad money habits and lots of debt. Start concretizing your financial goals—when do you want to pay off your debt? How much money do you want to save by what age? Set your financial goals then start making moves toward them.
Not Having A Savings Account
An all-too-common scenario is you keep a percentage of your salary in your account and thinking it will be your savings, but you end up withdrawing it before the next payday. Indeed, it’s difficult to save up when you have such easy access to your savings. Create a separate savings account that will serve as your piggy bank. This way, it will not be as easy to dip into your savings account.
Not Strategizing Your Debt Payment
Debt is a major obstacle to many Americans’ financial stability. Chances are, more than a comfortable amount of your salary goes to debt payment, and with little progress to show. This is because you are not strategically paying your debts. Some experts advise either conquering bigger debts first while others suggest paying off the smaller debts first. Another effective strategy is consolidating all your loans and refinancing your loan.
