7 Habits That Prove You're Bad With Money


Most of the things we do on a daily basis are habitual — that is we do them without really thinking about them. In essence, your behavior is a result of the habits that you’ve developed over time. These habits control how you talk, how you relate with others, and even what you do with money. There are good habits and there are bad habits. One can easily tell a lot about you by observing your habits especially when it comes to money. The way you use money will demonstrate whether you are good with money or not so here are seven habits you are indicative of someone who is trending in the wrong direction financially!

Habit #1: Failing to save

Failing to save money is one of the signs that you are bad with money. This is not just a bad habit but a dangerous one as it comes with a set of dire consequences. If you want to have good financial success then you must learn to save money. If you do not have any savings, you may not be able to cope in cases of emergencies.

Most people know the importance of saving money, however, only a few of them have enough money saved. There are several reasons why people fail to save and one of them is the habits that they have formed. If you have bad money habits such as failing to budget, being unable to control your spending, and simply lacking discipline then you will find it difficult to keep aside some amount of money every month.

One other reason why most people do not save is that they spend more than they earn. When you do not live within your means, you will spend more money than necessary and at the end of the day, you will be left with nothing. People who do this often spend their money on things that they do not need. Some people may even need to borrow more money to be able to meet up with their monthly expenses because of their bad spending habits. These types of people will not only fail to save but they will also run into debts.

If you want to be rich, you have to correct this bad financial habit. Plan your finances so that you will be able to live within your means. Don’t buy things that you do not need. When you do this, you will find out that you will still have extra money after spending which you can save. Once a habit is formed, it can only be replaced by another habit. Cultivate a new habit of saving money every time, no matter how little.


Habit #2: Relying on your parents for money

Another habit that proves that you are bad with money is relying on your parents for money. While growing up, your parents have always been the ones responsible for your well-being. They pay for your food, clothing, medical expenses and of course your shelter. But as you grow up, this needs to change. You have to learn how to be independent and fend for yourself financially. Relying on your parents is a bad habit and it can keep you poor.

Now, there is nothing wrong with getting some financial help from time to time. Maybe your parents give you a gift or buy you some groceries here and there but you must not make it a habit. Relying on their money, or anyone else’s money for that matter, will limit your ability to develop the skills to earn and save the money you need to live. Sadly, some people who rely on their parents will refuse to do any work because they know that they can always run back to their parents. These habits lead to laziness and make it difficult for them to achieve anything great. Such people may resign at work or quit their business when they face even a little bit of adversity.

If you want to become independent and financially free you have to stop relying on your parents for money at all times. The first step is to make up your mind that you are ready to stay on your own. Sometimes, it may be better to move out of your parent’s house and into your own space. This will give you a sense of responsibility that you are now in control of your life.

Staying on your own can be difficult at first so make sure you have a good plan. Learn to live within your means and create a budget you can work with. If you are not making enough money in your current role, see if you can work over time or alternatively start a side hustle that can help supplement your income.


Habit #3: Making minimum credit card payments

Using a credit card to make purchases can be of help especially when you are out of cash. You can buy whatever you need while you pay for it later. If you know how to use your credit card well, it will be of great advantage to you. If you pay your balance off in its entirety and pay it on time, you will not need to pay any interest and in effect will be using your card to finance short term loans every month. However, there are times when you may not be able to pay the balance off because you need money for other things or you simply do not have the savings available.

Most credit card companies let you pay only a certain amount as a minimum credit card payment monthly. Although this sounds like a fair deal — when you pay only the minimum, which is usually around $20 or 2% of the cards balance, you will start to incur hefty interest fees. Needless to say, this is a sign that you are bad with money.

The disadvantage of making minimum credit card payments is that you end up paying more money to clear your debt because of the high-interest rate. It will also take you a long time to clear off your debts if you only make the minimum payment. The average credit card debt is $6,194 and the average interest rate is 17%. If you make a minimum payment of 2% for instance, it will take you over 30 years to pay off that balance completely and you will pay more than double the amount you initially owed.

As you can see, the benefits of paying more than the minimum credit card payment are plentiful. By doing so, you can avoid unnecessary interest charges and be confident in your ability to manage your finances!


Habit #4: Dodging calls from creditors

Having debt is a serious problem but another serious problem is having your creditors calling you. Creditors’ calls can be incessant and it can soon become tiring. You may be tempted to ignore the call or find a means to stop them from calling you. However, dodging calls from your creditors is a bad habit and it is proof that you are bad with your money. You may be able to avoid a creditor’s call but it is usually not the best thing to do. It will make your creditors lose trust in you and see you as someone who is not honest. Even if you don’t have the money right now, the least you can do for your creditors is to pick their calls and explain to them why you may not be able to pay them back immediately. Some creditors will understand and they may be willing to extend your payment deadline if you negotiate well with them. Keep in mind that it may be difficult for you to obtain a loan from your creditors the next time if you have the habit of dodging calls from them.

Another reason why it is not good to dodge calls from creditors is that dodging the calls won’t make the debt go away. Even if you refuse to pick up their calls, you will still have the same worries. They may not stop calling you because they are motivated to get back their money from you. Dodging the calls can hurt you if your creditors decide to use other methods against you. Your creditors can call your friends and close relatives to reach you if you ignore their calls. This can be embarrassing but you can save yourself from the embarrassment by simply responding to their calls.

The longer you keep dodging their calls, the longer it will take you to pay your debts, and the more money you will need to pay. The interest on your debt will continue to accumulate and it may become difficult for you to overcome this financial hurdle.


Habit #5: Maxing out credit cards

Paying by credit has many benefits. Using plastic means not having to carry change around and offers you the ability to track your spending via your credit card statements. These cards can even be relied upon if you find yourself without savings and need to make an emergency purchase. However, how you use this credit card will indicate whether you are good with money or not.

Maxing out credit cards is not a good habit and it is a sign that you are bad with money. There is a maximum amount that you can spend on each credit card and spending this exact amount or very close to it means that you have maxed out your credit card. For example, a credit card of $3,000 with a balance of $3,000 is maxed out.

Maxing out your credit card can affect you in so many ways. You may not be able to take care of financial emergencies that may arise in the future if you max out your credit card. In this case, you would have to look for other sources of money to be able to finance your emergency expenditures. Carrying a high or maxed out balance also increases your credit utilization rate and this can negatively impact your credit score so it is best for you to avoid overcharging your cards. Luckily, you can avoid maxing out your credit cards by monitoring your card usage and sticking to your budget so that you are not overspending!


Habit #6: Borrowing from family and friends

There are times when you might need access to cash but the number of people you can borrow from is limited. One potential source of funding could be from your family and friends. It is usually easier to borrow from family and friends because of the lesser work involved. There is no need to write application letters or present collateral before family and friends give you a loan. However, even though borrowing money from family and friends is quite easy, it is a bad habit and proves that you are bad with money.

Although you may not need to apply before getting a loan from your close relatives, they will likely ask you what you need the money for. It becomes difficult to explain your reasonings especially when the money is to cover your financial blunders. You may end up telling a lie and this can hurt your relationship with them when they find out the truth. Borrowing money from family and friends may cause you to lose their trust if you are unable to pay back on time so tread with caution.


Habit #7: Not having a budget

Not having a budget is one of the main indicators that you are bad with money. People who do not have a budget often find it difficult to manage their money because they do not know how much they are spending or how they are spending it. People without a budget often spend more money on things that they do not need.

Not having a budget is a sign that you are not organized and it will show in the way you handle money. People who do not have a budget buy things on impulse and easily run into debt. If you want to have financial success, you need a budget. A budget will let you know where and how you are spending your money. With the help of a budget, you can easily reduce the money you spend on unnecessary things allowing you to focus on investing in those that will make your wealth grow over time!