Are you getting in your own way when it comes to your financial future? Maybe? It’s more common than you might realize. You overspend here, you splurge there and you spend money mindlessly. All of this leads to a less bright financial future than you might like.
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This article explores the six most common toxic spending habits in the United States today that keep people from growing their wealth.
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1. You’re Impulse Buy Frequently
Impulse buying will get you in trouble every time. You’re running errands, you’re feeling good, but you need a little pick-me-up. So you hit the Starbucks and drop $6 on a latte. If you’ve got kids in the car, that price point can quickly reach $25.
That’s every single time you stop at the cafe, which can add up to hundreds a month.
Maybe you see a cute purse or a cool set of golf clubs in the window of a store that you’re walking past. Or you’re up late at night, and some influencer convinces you that this new jewelry line is the height of glamour.
And you hit “buy now.”
Every time you buy on impulse, you’re taking money away from your future self. You’re depreciating your real wealth.
Fix it: Make a rule for yourself that you’ll never buy on impulse. Make yourself wait at least one day before you go back to make that purchase. Nine times out of 10, you’ll change your mind. And you can put that coffee money in the market where it belongs. After all, you have coffee at home.
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2. Your Credit Cards Finance Your Lifestyle
You applied for a credit card to start building your credit score. And it worked. But now you’re living off your credit cards. The balance gets higher each month, and you don’t really feel the effects because you pay a little off each month.
What happens quite quickly is that your credit limit will be maxed out, and you’ll have to start paying that balance all off, with interest. Now you’re paying interest on those silly impulse buys that you don’t even care about anymore.
Fix it: Only let yourself use your credit card if you plan to pay off the entire balance at the end of every cycle, so you never pay interest. If you can’t pay it off, you can’t afford it.
3. You Ignore Subscriptions and Small Charges
You’ve got an annual membership for an app on your phone that you never use. But it’s only $39 a year. You’re getting magazines you never read. But they’re only $12 per year each. You’re signed up for every streaming service, and you only watch two or three.
These “small” charges add up to hundreds of dollars every year that you could be investing and growing your wealth.
Fix it: Sign up for a free subscription manager like Experian. These apps will track and cancel unwanted subscriptions and save you tons of money that you can put on the market.
4. You Soothe Yourself With Shopping
You’re tired. You’re bored. You’re frustrated. You’re annoyed. So you shop. You scroll shopping sites and pick out items you don’t really need.
It’s called retail therapy, and it’s not worth the money. You still end up feeling crappy, and now you have less money and more random items.
Fix it: If you need therapy, get real therapy. If you just need to vent, schedule time to talk to a friend or family member you can vent to. When you find yourself reaching for your wallet to soothe your emotions, go for a walk instead. You’ll improve your health and save your financial future.
5. You Live Paycheck to Paycheck on Purpose
Many millions of people are genuinely financially insecure. They have just enough, or not enough, money to meet their basic needs.
But if you make more than enough to meet your needs, and you’re still barely making it to the next paycheck, it’s time to make some changes.
Overspending is stopping you from building wealth. It may add up to hundreds of dollars every month.
Fix it: Look at your budget, discover where you are overspending, where you could cut back, and then make a budget you’ll stick to. You can even use a budget app that will send you reminders and alerts when you’re veering off course.
6. You Suffer from Lifestyle Inflation
One of the biggest issues people face when overspending is that they continue to increase their lifestyle spending with every raise in pay they get. Even if they get a side hustle to improve their financial situation, they end up spending that money on frivolous luxuries they don’t need. And they still live paycheck to paycheck to paycheck.
If you don’t stop this habit now, you’ll end up making a ton of money and still being financially insecure. When an emergency happens, you’ll be unprepared and on your way to being broke.
Fix it: Every time you get a raise, set up an automatic withdrawal for at least 50% of that raise to go to your brokerage account unless you have outstanding personal debts, then that will get first priority. Then, invest that transferred money immediately. You’ll grow your wealth, and you can still improve your lifestyle a bit along the way.
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This article originally appeared on GOBankingRates.com: 6 Toxic Spending Habits and How They Hurt Your Financial Future
