Financial Diets Will Destroy Your Soul and Your Wallet

According to Chelsea Fagan, “when talking about debt is taboo, it keeps people more in debt.” 

Debt can be a huge cause of embarrassment, anxiety, and even stress for anyone who has it. Unfortunately, it is common among adults in the US, UK, and many other advanced countries. The most widespread sources of debt include student loans, mortgages, and credit cards.

If you intend to get rich and stop living an average financial life, you must overcome debt hurdles. Not only is debt bad for your wallet, but it also has several negative impacts on your mental health.

Debt is not the only bad financial habit that can get you in trouble or hinder you on your path to wealth. Below are other bad money habits and recommendations for ending them.

Using Store Credit Cards for Points

Generally, credit card rewards can help you keep more cash in your wallet. However, most credit card rewards do more damage than good.

Most companies offer these rewards in a bid to encourage their customers to spend more. A careless customer will end up buying things he doesn’t need just to claim the rewards; this is a poor financial habit.

Also, many store credit cards have heavy restrictions, with some limiting their top cash-back rewards to certain store items. It’s dangerous to sink more into debt because you want to meet a specific credit card point, and it isn’t worth your peace of mind.

Carrying a Credit Card Debt

The interest rate on credit cards usually comes in double digits, meaning that people with credit card debt are walking around with a torn pocket and losing money with every step they take.

Most people with a credit card balance only pay the minimum amount monthly, implying that it’ll take several years before they can completely cover the debt they owe. We recommend that you pay off your credit card balance as quickly as possible. You should also start redirecting your money into investments and savings to start your journey into financial freedom.   

Overspending on Convenience

It’s a safe practice to spend on conveniences that will give you more time to focus on more productive things. But it is often common to see people overspending on some worthless amenities. You’re unlikely to have a good saving habit if you’re constantly buying takeout meals or trying to keep up with the latest editions of your favorite gadgets.

Reducing your expenses on irrelevant conveniences is a crucial step towards amassing wealth. You can cut costs on some house chores, including cleaning, minor car repairs, entertainment, food, and clothing. Don’t overspend yourself into debt.  

Not Saving Enough or At All

It’s hard to consider saving money when you’re already deep in debt. But you don’t need to start big; a little now and then will not only improve your wallet balance, but it’ll also help you maintain the habit when you finally clear your debt and are now making more money.

Saving and maintaining an emergency fund will help you handle emergency expenses better and prevent you from falling deeper into future debts.

Making Impulse Purchases

When most people hear impulse purchase, they assume it’s only about buying something tangible like a dress, without initially planning for it, but this is not true. If you do as little as add a pack of gum to your shopping list at checkout, you’ve fallen victim to impulse purchase. But not to worry, it happens even to the best of us.

Unplanned expenses may not immediately affect your wallet balance, but they can ruin your budget in the long run and gradually lead you deeper into a financial crisis. It’s best to shop with discipline.