When it comes to the exercising of common sense in those who are dispersing funds to all the needed sources that many people face every day, some people come up short in the area of smart choices. It is very easy to get into a trend of bad habits with financial matters. Very few people have the money to simply buy whatever they want without giving it a second thought. Most people have to make up a plan for their purchases and stay cautious in order to keep themselves afloat.
Many people show their bad habits by getting deep in debt with credit cards. Nowadays, credit cards are easy to get. Anyone can get a variety of Master Cards, Visas, American Express, Discover and charge cards of all sorts from retail stores without too much difficulty. You don’t have to have much of a cash flow in order to get all these cards either.
None of all these card companies seem to consider that a person may have to cough up payments to other card companies. You may trick yourself into thinking that you have all these cards simply for emergencies. However, if you get into the bad habit of charging at the drop of a hat, you could easily reach their spending limits before you even realize what’s going on. Then, with several of the cards at that point, you could get to the place where you can’t make the minimum monthly payments.
The temptation to borrow money from relatives becomes strong at a point like this, but that would simply be another type of bad habit to get into. Relatives might give you assistance for a while. They may allow you to form the bad habit of running to them every time you run out of cash. Nevertheless, there will come a day when you will reach the point where the patience and mercy of the relative wears thin. The relative may not only cut off the loans, but might stop talking to you also.
Speaking in terms of good friends, both borrowing and lending are bad financial habits. It jeopardizes the relationship by putting a strain on a person that many friends cannot handle. A friend may not be good at remembering the details of the loan, but yet there could be an animosity of distrust if a written contract is proposed. No matter how you look at it, this is not a winning situation. It’s just a plain bad habit.
There are many mistakes that can be made, but one is prominent above others, the practice of not sitting down and making up a budget. A general idea is visualized as to where the money goes, and someone might think they have it all upstairs, but it never quite comes together as bits here and there are lost. Putting it all on paper (on a spreadsheet in a computer) cannot be equaled. Only then will the figures add up and you will see the true layout of your spending.
Most utility companies provide a grace period before cutting off the power. Many people count on this grace period and it turns into a bad habit when it comes to finally getting the utility bill paid. If you do this you run the risk of getting you lights and water cut off. It also puts a black mark on your credit rating.
Something as simple as managing your checking account can turn into a bad habit. One mistake that people often make is to throw away receipts from transactions they have made. Naturally, there is a time to throw things like that away. However, until they are recorded, it is best to keep deposit, ATM, and other debit slips to verify the correct balance in your account.
Many people even have the bad habit of not regularly balancing their checkbook. If Internet banking with a software program like Microsoft Money or Quicken is the preferred choice, a person can make it much easier for themselves. It is important to be sure that your account has a balance of what you think it should be. For one thing, it’s the best way to catch fraud. Keeping your money managing habits under control can make your life less stressful and more productive.