A Nation Of Bad Financial Habits?
We’re a nation with bad habits. I’m not talking about our bad eating habits, our smoking habits, or how often we pick our noses. I’m talking about the bad financial habits! For those that doubt that we’re a country of the huge variation in our financial sensibilities, consider the fact that we’re the wealthiest nation in the world and yet 45 million of us live below the poverty line.
Perhaps it’s the lack of personal finance education in schools, or our culture of ‘buy now, pay later’, instant gratification, but whatever the cause, the fact remains that our financial habits are in severe need of correction.
Here are some of our worst financial habits as a nation, and the steps you can take to avoid them, without sacrificing your quality of life. If you see any of your bad habits in the list below then you owe it to yourself, and your family to correct them…
Not saving enough
It’s a criticism that baby boomer parents often level at their generation X and millennial kids, and while it’s often an oversimplification they’re right to emphasize the importance of saving. This is easier said than done when private rent is inflating year-on-year and mortgages are increasingly unattainable across the country.
Fortunately, when it comes to money saving strategies… you’ve come to the right place! Whatever your income and monthly financial commitments there’s a good chance that you can squirrel something away week by week resulting in a pleasantly surprising result come year-end.
Making minimum repayments
Many credit card and loan companies like to pitch low, low monthly repayment options as a selling point, but these are the very definition of false economy. Minimum repayments will ensure that you pay off mostly interest and very little capital, prolonging and adding to the debt.
Increasing your repayments (even by as little as $50 a month) can allow you to pay off the debt quicker and pay less in interest. In times of real financial hardship when you’re struggling to put food on the table, then and only then should you reduce your debt to the minimum monthly repayments.
Letting debt spiral out of control
Paying off multiple debts with wildly disparate interest rates, and repayment dates can lead to debts spiraling out of control fast. Make sure that you manage your debts effectively by consolidating them into a single debt. Check out consolidate.loan to see how you can reduce all your existing debt to one single, more manageable repayment. Doing this will prevent you from paying over the odds in interest while improving your credit card since all of your debts are technically settled by the new debt of the consolidation loan.
Doing this will prevent you from paying over the odds in interest while improving your credit card since all of your debts are technically settled by the new debt of the consolidation loan.
Ever gone into a store and come out with far more than you intended to buy? That’s because stores understand the psychology of shoppers and do everything they can to encourage impulse spending. Before you go out to the store, make a list of items you need and stick to it. Stockpiling on items you’ll continue to use and take advantage of multi-buy offers will help you make savings and reduce the cost of your weekly shop.
As with most bad financial habits, it only takes a slight modification of our behavior to break them, and turn your situation around before it starts to have a lasting impact on your financial well being.