Some habits can help you financially, while some habits can wreck your finances. So many people have bad financial habits and are not aware of it.
A bad financial habit would leave you in ruins and is most times the difference between being rich and poor. Sometimes, it isn’t about how much you earn, but certain financial habits you live by.
The following habits are habits you should be wary of as they can wreck you financially:
1. LIVING ABOVE YOUR MEANS
No matter how much you earn, if you live above your means, you would struggle financially. There should be a significant difference between your income and expenditure; when your expenditure equals or surpasses or is even close to your income levels then you are in huge financial problems.
People live above their finances for mostly insignificant reasons — this is one habit everyone should be wary of.
2. NOT SAVING
You can save up funds for an investment or for a vital purchase or even for emergency situations, and saving is a good financial habit. However, not saving is a terrible way to live your life; it’s a bad financial habit that could ruin you.
3. IMPULSE BUYING
This is another habit many people indulge in without really knowing that it can result in huge financial outlay on the long run. No matter how little the purchase might be, impulse buying brings more bad than good. Little drops of water they say makes a mighty ocean, and that is an example of what impulse buying can do to your finances.
Most times, impulse buying ends on irrelevant items, making it an even terrible habit financially.
4. COMPETING WITH OTHERS
It’s surprising that a lot of people tend to live their life competitively, irrespective of their financial strength. No matter how wealthy you are, living such a life would only make you spend money unnecessarily.
5. DEBT
Debt is something everyone should be wary of. One thing about debt is that it’s easy to take a loan and extremely hard to pay off. The more debt you are in, the more money you are robbing your future self of.
Debt is another financial habit that can drain your finance.
6. POOR NEGOTIATING SKILLS
Being a poor negotiator means you would pay more than the value of a product. This is a dangerous act, especially if you are a businessman. Being able to know the worth of different products is highly important, especially if you are involved in buying and selling.
Being a poor negotiator only means you would keep losing money time after time.
These tips should be taken into cognisance by anyone who’s willing to live a financially free life.
Jake