Are Negative Habits Keeping You From Your Financial Goals?

Stress over finances is a leading cause of depression, marital problems and even divorce. Feeling anxiety over money can leave you feeling helpless and insecure about your future. Are your bad money habits partially to blame? If so, then you have the power to turn your finances around. Read on to learn five habits that may be keeping you from reaching your financial goals…

1. Not keeping a monthly budget

No one habit contributes more to financial success than making and sticking to a monthly budget. First of all, a monthly budget forces you to face the facts about your finances. This will help you make realistic choices concerning what you can and cannot afford. Second, a monthly budget enables you to track where your money is going. You can pinpoint all the unnecessary purchases that are ruining your finances, and cut them out.

Finally, a monthly budget helps you set (and reach) financial goals. Set aside a payment as part of your monthly budget that will go into savings or towards paying down those higher balances on your credit cards. Once you've allotted the money that way and planned the rest of your monthly spending around it, it's much easier for you to carry through.

2. Making late payments

Just one late payment can wreck your finances, taking you further from your financial goals. Paying a credit card payment late usually results in a hefty late fee. Even worse, it can cause your annual percentage rate to rise, resulting in higher interest payments. If the late payment is for a car, the same consequences will apply, just on a larger (aka more expensive) scale.

Furthermore, payment history accounting for 35% of your total credit score, so you could be paying for that one late payment in the form of higher interest rates on any charged purchase for a long time to come. If financial stability is your goal, work at making all of your payments on time every month.

3. Chasing the "next best thing"

Are you constantly trading in your car, cell phone, etc. for a newer, more expensive model? If so, then you'll always be paying top price for goods and you'll never catch up financially unless you earn a hefty salary. Usually, when a hot new product hits the market, the price is very high. Sellers often anticipate that consumers will be too excited to wait. A product that is on the cutting edge of technology now could be run–of–the–mill in a few years.

When the first electronic readers came out, they cost well over $500 dollars. Now, just a few years later, you can get the most state–of–the–art e–reader for less than a hundred. If you're one of those consumers who is patient, the price will often come down after the initial novelty wears off. Waiting a few months to a year could result in a savings of hundreds of dollars per item. Not to mention the fact that you can avoid flash–in–the–pan products that turn into an expensive buyer's remorse.

4. Spending beyond your means

We're all tempted to buy things that we really can't afford. It's especially tempting when you can just charge it and pay it off later. Before you buy that 60–inch HDTV or give in to that all–Italian leather living room set, take a moment to consider how practical your purchase really is. Credit card interest rates can sometimes get very high, as mentioned above.

Calculate how long it will take you to actually pay for the luxury item you're considering. Now, think about how much more it will really cost you to actually pay it off, once you add in all those months of interest. Instead of charging a bunch of expensive items you can't really afford, consider saving for the item instead and paying in cash. If you can't afford to do that and the item is not an essential, then maybe you don't need to buy it after all.