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7 Scary Habits That Are Damaging Your Finances


Do you ever wish you have a time machine to correct your past mistakes, especially those that came with a price tag? Bad news! You can never turn back time. The good news is you can find ways not to commit them again.
People make mistakes, especially with money. It’s part of learning how to be financially responsible. But when these mistakes are in a cycle, you have a big problem. It’s time to rethink your money habits. Because making the same mistakes again and again is not just depressing, it’s frightening. It can drown you in debt or lead you to bankruptcy.
Don’t be haunted by bad debts. Correct these scary money habits before it’s too late.

1. Spending beyond your paycheck

This is so basic yet some people still forget to practice it. For instance, your take home pay is P12,000 a month, yet your expenses (bills, food, and shopping expenditure included) is at P13,000 a month. And there you are, wondering why you’re money won’t suffice until the next payday.
If you continue spending more than you earn, you will find yourself in a serious financial trouble. Stop spending more than you can cover in a month or use loans to pay off your debt even. Learn to control your spending habits or you will crawl until the next payday forever.

2. Failure to budget

It is hard to monitor your money when you have no target budget to compare to. Your budget serves as your map when it comes to your financial journey. Without it, you’ll get lost along the way.
Many applications and online resources are available to help you budget your money. What’s important is you set your financial goal, prioritize your expenses, and know the difference between your wants and needs.

3. Not tracking your expenses

Ever wonder how your P5,000 slipped from your hands easily? It wasn’t stolen but it felt like it was. Why? Because you did not track your expenses.
Keeping track of your expenses is important to avoid repeating the same financial mistakes twice. Monitor your money to track if you’re overspending. This can help you decide how to spend your money next time.

4. Impulsive buying

It’s a 3-day sale, and suddenly, you found yourself holding two bags full of shoes, clothes, and other things you wouldn’t even use for the next six months. How did that happen? Your impulse told you so.
Your financial budget is useless without discipline. Before making a purchase, always stop and ask yourself if you really need that new bag.
Do not justify your wants and mistake them as needs, or find an excuse for blowing up your financial goal. Never let your impulse kill your budget.

5. Using credit cards for ordinary purchases and points

Often, we use our credit card for everyday purchases to earn points because having, for instance, 15,000 points can win you a trip to Hawaii. But, it’s a trick. Credit card companies offer rewards to encourage you to spend.  As you raise your hopes to earn more credit card points, you raise your debts too.
Use cash for everyday purchases like gas and groceries to avoid this.

6. Not trying pawning

When you’re badly in need of cash, using credit cards or borrowing could only lead you to debt. Try online pawning instead.
PawnHero offers a convenient way of solving short-term cash needs. Take photos of the items you want to pawn online to receive a fair estimate quickly. There are no hidden costs and penalties.

7. Failure to save

Emergencies can happen anytime, and savings can help you get through it.  
Part of your budget must include a savings component. You should at least have 10-30% of your money saved for emergencies and your future retirement. After all, it’s never too early to think of your future.
Not knowing how to handle money properly is a scary habit. Avoid debt and bankruptcy by breaking it now.  

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