Saving money can be a difficult task. It requires discipline, careful planning and an understanding of where your money is going. Unfortunately, many people fall into bad habits when it comes to saving money. These bad habits can have a negative impact on your finances, leaving you in a worse financial position than before. In this article, I will tell you about 10 bad habits of saving money and how they can hurt your overall financial health. I hope that by recognizing these pitfalls, you will be able to make better decisions with your money and become more financially secure. Read on to learn more! 

1. NOT TRACKING EXPENSES 

It is important to monitor where and how you are spending your money, so that you can identify areas of improvement and make the necessary adjustments for better savings.

2. IMPULSE BUYING

Impulse purchases often lead to unplanned expenses that could have been easily avoided by setting a budget and sticking to it. There is also a 24 h rule which you can apply: when you want to buy something above the $30, give yourself a 24 h to think about it. You will see that sometimes the next day you don’t feel like buying it anymore because you are not sad or stressed anymore. 

3. SPENDING WITHOUT A PLAN

Setting up a financial plan helps ensure you will stay on track while saving money. Without one, it’s easy to overspend on things you don’t really need.

4. PAYING BILLS LATE 

Late payments not only result in costly late fees but also hurt your credit score, making it more expensive for you to borrow in the future. 

5. NOT SHOPPING AROUND

Comparison-shopping is one of the best ways to get the most bang for your buck. Taking a few extra minutes to find the lowest prices can save you a lot in the long run. For example I buy products for cleaning the house only online because it’s cheaper this way. I buy it once or twice a year and I do not worry that I will run out of something and end up buying it at the regular price in the supermarket. 

6. SPLURGING ON SMALL ITEMS

Spending too much money on little things like fancy coffee, snacks and online subscriptions can add up quickly and put a dent in your savings goals. It is called the „latte effect”. One latte may not cost you much money but think about all the coffee you are buying and count how much you spend in a month, in a year. Coffee and maybe bottled water. Add some work lunch to it and some snacks. You end up spending more money than you think. 

7. USING CREDIT CARDS EXCESSIVELY

Credit cards are convenient and often offer rewards, however if you’re not careful with them, you could end up paying high interest rates that will make it more difficult to achieve your financial goals. Also there is one advantage of getting rid of the credit card – you spend less money. It is proven that paying by cash is good for saving money, making more considerable purchases and being more happy with the product you bought. 

8. LIVING BEYOND YOUR MEANS 

Trying to keep up with others by purchasing more than you can afford is a surefire way to ruin your savings plan. Especially when you spend lots of time scrolling through social media. The newest iPhone, branded clothes, expensive vacation – the reality doesn’t look like that, trust me on this. It’s ok if you don’t switch your phone every two years or if you don’t have a Mac (I don’t). 😊 

9. NOT HAVING AN EMERGENCY FUND

An emergency fund is essential for dealing with unexpected expenses, so it’s important to set aside a portion of your income each month to make sure you have enough money saved up in case of an emergency. Emergency fund should be at least equal to your 6-month income but I recommend making it a 12-month period to feel really safe. 

10. NOT TAKING ADVANTAGE OF TAX BREAKS

Taking advantage of tax breaks and other incentives offered by the government can help reduce your taxable income, resulting in more money staying in your pocket instead of going to Uncle Sam.  

By being mindful of these 10 bad habits, you will be able to better manage and save your money! With a bit of discipline and patience, you’ll soon see your financial goals become reality. Good luck!