We all have bad habits like biting our nails or tapping our feet. While those may not have a lasting effect on our lives, bad financial habits often times do. Here is a short list of some bad financial habits that you need to break right now, once and for all.
- Switching credit cards. I know that some credit cards offer a 0% introductory offer and others give you more rewards. There will always be a credit card that is better than your current one. However when you open up a new credit card, your credit score drops. Not only that, but when you cancel your old credit card your score will drop even more.
- Borrowing. If you don’t have enough money to pay for something, then you can’t buy it. If you really want it bad, then budget for it every month and buy it when you can afford to pay it in full. If you can’t budget for it, then you must not want it that bad.
- Impulse buys. Resist the urge to buy something on a whim. It will most likely be a bad decision. To avoid doing this, go out with cash only, no credit card.
- Throwing things away. Many things, such as an older iPod or outdated gaming system still have value to others. Instead of throwing these items away, sell them on eBay. A good rule of thumb is this: I will not buy a digital camera until I’ve sold my old one first.
- Credit report. We’re all allowed to check our credit report free once a year. It costs money to look up your score, but getting your report is free. It’s imperative to do this to see if you’ve been a victim of identity theft. It’s also useful to check for any errors on your report that could hurt your credit score. If you find any mistakes you should write a credit report dispute letter.
- Paying late fees. Pay your bills on time every time. What service do you even get from paying late? It’s money you pay that’s flushed down the drain. If you forget to pay a bill on time and have a good payment history with them, you can contact them and ask them to remove the late fee. Most companies will do this in order to keep a long time customer.