Managing your finances can be associated with lots of stress, so you should take the right steps to avoid making mistakes. Bad financial habits can hold you back from a bright financial future, so you should do your best to get rid of them.
According to a 2015 report by the Bureau of Labor Statistics, a unit of the United States Department of Labor, 50% of small businesses failed in the 1st 4 years. With good financial habits, you can better manage not only your personal but also business finances.
Here are 8 bad financial habits to avoid:
- Having No Idea What You’re Actually Spending on
Many people live paycheck to paycheck. Pay attention to what you’re spending your money on. Track your expenses, andsee how much is coming in and going out.
- Spending More Than You Earn
The National Financial Capability Study (2015) shows nearly 1 in 5 Americans spend more than they earn and 38% break even. Don’t spend more than you earn.
- Having No Budget
By focusing on how much money is coming in and going out, you’ll be able to develop a budget. Create a working plan focused on covering your expenses and saving for the future.
- Not Knowing Your Credit Score
According to a recent survey by Money Tips, about 30% of people don’t know their credit score. Check your credit at least once a year. This refers to both bad and good credit score owners. Thus, you’ll keep your finances healthy. Improve your personal score today since it’ll likely serve as your new company’s credit history.
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- Not Opening Your Statements and Bills As Soon As They Arrive
People usually fail to review their statements and bills. As a result, they miss out on important information concerning their budget. Catalog and categorize your statements and bills as soon as they arrive.
- Don’t Avoid Working with a Mentor or Financial Advisor
Don’t think you can manage everything yourself. This refers especially to new business owners. A mentor or a financial advisor can help you get rid of your bad financial habits.
- NotTakingControl of Your Own Financial Life
According to an Equifax survey, only 15% of Americans gave themselves an “A” in financial literacy. Gain a better understanding of your finances. Learn the lexicon of finance to manage your money better.
- Making It Hard to Save
Consider setting up automatic transfers for bill payments. Also, automatically have 10% or more of your paycheck sent directly to your savings account.
Though it can be a bit difficult, you can break away from your bad financial habits.Good financial habits will help you improve your bottom line and guarantee a better financial future.