There’s not really that much difference between physical and financial wellbeing — what you put in your body and your bank account now will determine your quality of life down the road. By identifying bad money moves and making a few changes to your spending habits you can shift your money-making into first gear.
These five common money traps are a recipe for financial disaster.
You rarely set foot in the gym but still pay fees.
You’ve heard the mantra “if you haven’t worn it for six months, get rid of it.” The same applies to your gym membership. Stop the direct debits, get out that pricey gym gear and put it to good use going for a walk instead. Walking is free, it gets you outdoors, and it’s good for your mental health.
You rely on credit cards but only make the minimum repayment.
If you can, it’s best to repay the full amount every month to avoid paying additional interest. Michael Baumann, Executive General Manager Consumer Finance CommBank says, “Paying the full amount owing as soon as possible will minimize the amount of interest you’re charged and help you clear the balance sooner. By making only the minimum repayment on your credit card from month to month, you may find it takes a long time to repay the amount you owe.
“It also significantly increases the cost to you as you’ll be charged the interest on the balance you owe over this period of time.”
You spend on impulse.
Emotional spending is like emotional eating — you know you don’t need that extra chocolate, but it makes you feel good in the short term.
The same applies to clothes shopping, which is a common emotional spend. An easy fix? Get into the habit of waiting before tapping your savings. Even one day could be enough time for you to realize you don’t need the item after all.
There are ways to have your cake and eat it, too, though, in moderation. Try setting a limit per transaction on your credit card.
You don’t budget.
Imagine being able to shop, minus the guilt. That’s where a budget comes in handy, and learning how to stick to one is your ticket to financial freedom.
You’ll be able to see how you’re using your money and identify ways to save for the good things in life as well as necessities like bills. There are plenty of tools to help you map out your spending so you can keep to your budget. Try Spend Tracker, which lets you categorize your credit card spending making it easier to see the impact your spending decisions have on your everyday finances.
You spend a lot on takeout.
Reusable coffee cups are great for the planet but they’re not doing our bank balances any favors. Each time we get a refill at our local coffee shop, it sets us back a few dollars. If you’re sipping on more than one coffee a day, as well as buying lunch, that’s some serious damage.
Add UberEats to the mix and you’ve spent up big. Doing the sums on what you spend each week on these incidentals might be enough of a wake-up call.
Stick to one coffee a day or better still make it at home, pack your own lunch on most days, and cook dinners in bulk to save time.
This article originally appeared on our sister site, Now to Love.