Spring Cleaning: 4 Spending Habits to Dump that will Save you Money
It is not just your home that needs some spring cleaning. If your finances are in disarray, it is time to de-clutter and embark on a fresh start. Most of the times, it’s our spending habits that plunge us into the financial doldrums. Here are some common bad spending habits that you need to dump in order to begin the next year in a great financial shape:
#1 Using your credit card for ordinary living expenses
If your credit card is financing your daily living costs such as purchasing groceries, that could be a sign that you’re living beyond your means. Most people don’t realize how quickly things like unexpected joblessness, medical issues, or the piling up of credit card debts can add up to become a major issue. So try to stick to cash as much as possible, or if you’re going for those rewards points make sure to pay off your balance in full every month.
#2 Gambling and lottery tickets
It is tempting to purchase a lottery ticket after seeing someone win a $10 million jackpot but gambling is not a wealth accumulation or investment plan. The odds of you pulling off a massive win are pretty low given that there are millions of other gamblers eyeing the same prize. In fact, the odds of you winning any jackpot is practically zero. It is pure luck and you might not be lucky for a lifetime no how much you gamble. If you are hooked to the habit, there could be some bad news. It’s estimated that some 75% of poor people admit to playing lottery or gambling on a regular basis. This is in contrast to only 6% of the wealthy.
#3 Splurging on entertainment
If you are the kind of person that parties every weekend, splurges on expensive wines, movies, dining, dating, or exclusive membership clubs and other costly social dos, chances are that you could be spending almost all your monthly income and saving very little money for the future without even realizing it. It’s time to cut down the habit to only those that are absolutely essential. As a general rule, avoid spending more than 10% of your income on entertainment. You’ll be surprised at how fun it is to watch your savings account grow!
#4 Being too generous
Are you the nice friend who is always open to helping everyone out of their little financial woes? Once your generosity has been acknowledged, people will always come knocking on your door with all kinds of sob stories and a huge chunk of your income will end up in the pockets of your friends, many of whom are able-bodied and with a regular income. While it could feel nice to help a friend in need, follow these two simple rules: 1. Never lend more money than your comfortable losing. 2. Never lend to a friend who hasn’t paid you back twice.
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