Money, unavoidably, makes the world go round – our worlds, at least, as day by day we sustain our households and lifestyles through the numbers in our bank account. Shrewd financial decisions are not the easiest to make, and especially so in a hostile economic environment such as this one; bad money habits are rife, and are making lives harder too. If you believe you are a victim of poor financial habits, what can you do to turn things around?

The Most Common Bad Money Habits

Of course, in order to set yourself on the right path it would be helpful to know what the wrong path looks like. People with bad money habits aren’t cloak-wearing villains, strewing money hither and thither while laughing and twirling their moustaches; the vast majority of bad money habits are upheld thoughtlessly, passively or otherwise unawares – which makes defining them all the more important.

The most pernicious bad money habit you can have is impulse buying. When everything you want is a click of a button or a tap of a card away, restraint is much more difficult to display. Whether it’s treating yourself to a takeaway multiple times a week, or habitually heading into the high street to buy new things for your home, unplanned spending can be ruinous for your financial situation.

Too much unplanned spending without proper consideration for your financial situation can lead you into debt, the second poor money habit. Debt on its own is no real problem, provided you are meeting the terms of your lender and can afford to do so. Unaffordable debt, though, is a spiral. Meanwhile, passive bad habits like having no emergency fund for unexpected costs can compound with other habits, leaving you in a terrible situation.

Tackle Debt First

So how do you break the cycle? The first step is to pay down any debts. Mortgages and other large-scale debts are fine as they are, but loans and credit cards should be paid off at your earliest convenience. You can use debt consolidation loans to bring them all under one roof, making repayments easier and saving you from predatory interest rates.

Budget

With your debts under relative control, your next step should be to paint an honest picture of your financial situation. Start with income and outgoings for each month, and get more and more granular with the information you gather. With this information, you can figure out both the maximum you could save each month, and the costliest aspects of your present lifestyle.

Save!

All that’s left, then, is to start saving! Having a savings goal in mind is vital for keeping yourself true to what is possibly the best habit you can have around money. This goal could as simple as raising the funds for your next holiday, or it could be as large as buying a home. Whatever it is, it should have a value attached to it – and that should fuel your saving an ample amount each month.

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