Children often have lofty dreams of striking it rich, buying every superhero toy ever made and owning a mansion with a pool full of chocolate pudding. As they age, however, this ridiculous notion fades and is replaced with more realistic financial expectations – getting and staying financially solvent.
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If you’re forever struggling to make ends meet, your habits may be to blame. Audit your behavior and determine if you engage in any of these common habits that could stop you from being as financially flush as you desire.
1. Expecting To Struggle
Although it may seem difficult to believe, one of the first steps towards acquiring wealth is expecting it. If you’ve resigned yourself to the idea that you will always have to scrimp and save to have enough gas in your car come payday, you’re likely setting yourself up for failure.
If you want to be wealthy, believe you can be. Bolster your confidence by engaging in money-healthy activities like budgeting and setting up a savings plan. If you’re a visual person, set up a reminder of your wealth goals by creating a mood board featuring pictures of all the things you plan to buy once you’ve reached your goals.
As you participate in these beneficial activities, your wealth will increase, naturally building your confidence in a bright, financially healthy future.
2. Living In Expensive Housing
Your housing will almost certainly be your single largest financial item. You shouldn’t, however, allocate an unsustainably large amount of money to this portion of budget. As a general rule, always try to select housing that you can cover with 25 percent or less of your monthly earnings.
Making this smart choice gives you 75 percent of your income to use at your discretion. When you’re looking for housing to fit this bill, explore all options as, often, it’s less expensive to purchase than to rent.
3. Charging Everything
If your go-to at the cash register is pulling out your charge card, you might be costing yourself a lot of money. While charging everything is fine – if you pay it off each month – most chronic chargers don’t.
When you let balances roll over, those little odds and ends you picked up end up costing you big time. Make sure you can pay off whatever you charge each month to avoid bleeding money.
If you’re chronically too short on funds to pay upfront and, as a result, end up charging it, you’re living above your means. Create a budget that doesn’t surpass your income and follow it faithfully.
4. Giving Overly Extravagant Gifts
As the holiday spirit fills your body, it can be easy to over-spend on under-the-tree or beautiful birthday-wrapped presents. While the generosity that inspires you to buy over the top gifts isn’t bad, giving in to this desire all the time is.
When giving gifts, look for things that are as affordable as they are meaningful. While your gift recipient may totally appreciate a new tablet or set of several hundred dollar headphones, the excitement they receive from the gift won’t be worth the financial outlay.
Particularly when buying gifts for your kids, it’s far preferable to spend less and sock the rest away into savings you will use to brighten their futures.
5. Buying Items On Impulse
Impulse buys are the enemy of financial freedom. When you engage in impulse buying, you skip the decision-making process all together, substantially increasing the likelihood that you spend more money than you should on items you didn’t really need.
Any time you want to buy something over $20, give yourself a week to consider whether you really need the item at all. If you ponder and still want the item, take some time to shop around instead of opening your wallet to the first vendor that has the item on hand. If you practice this with regularity, you’ll see your savings account balance creep up.
6. Missing Opportunities
Even though it might not happen every day, you’ll probably be faced with opportunities to make more money from time to time. This opportunity could come in the form of an offer of a job that, while more work, will come with a bigger paycheck.
More simply, it could come with the opportunity to work odd jobs for a family member or neighbor. While you shouldn’t jump at every opportunity that comes your way, you should be willing to step out of your comfort zone from time to time. In doing so, you’ll most likely reap some financial rewards.
7. Eating Out, Constantly
While it’s true that everyone has to eat, you can control how much or how little you spend on sustenance. If you’re a fan of eating out, you’re probably spending more than you need to on food.
Swapping meals out for meals at home can substantially reduce your financial outlay, particularly if you’re feeding a whole family.
As an added bonus, it may also benefit your waistline, as meals from restaurants are typically much higher in calories and fat than those you fix at home.
8. Vacationing To Excess
Particularly if you’re working hard for your money, you’ll need a break from time to time. If you want to take this break and not undo all of your good work, be frugal about it. As a general rule, avoid spending more than five percent of your annual income on vacationing, recommends Thomas C. Corley for Business Insider.
To put this plan into action, figure out your five percent and keep this sum in mind when you start looking for vacation options. If you’ve always dreamed of a vacation that is grander than you’ll ever be able to afford on five percent, try stay-cationing for a few years to save up your five percents for a fancy escape.
9. Driving A Fancy Car
Once you’ve arrived at your financial goals, you can splurge on whatever set of wheels you want. While you’re still working to get there, however, you should keep it simple and focus on functionality.
Instead of continually trading in lease after lease, buy an affordable car and drive it until it starts giving you issues. By following this frugal path, you can reduce your auto-related outlay substantially while still not suffering for lack of transportation in the process.
10. Gambling
If you desire financial stability, gambling of any kind is an ill-advised activity. Yes, it’s fun to stick some quarters into those slots – and it doesn’t even seem that dangerous as it’s not that much money anyway.
However, this money adds up and, for many, the thrill of gambling induces excessive spending on these types of activities, compounding the effect of the negative behavior. Swap gambling for something that is competitive but not wallet-busting – like a weekly euchre game on which you have no money riding.
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