Everyone has bad habits that they need to give up. These are the things that you write down on your new years resolution every year. “This year I’m going to stop biting my nails.” Or “This year I am going to eat less fast food.” Here are the 9 Money habits that you should break.
Being Scared to Negotiate
Have you heard of the Good Guy discount? No? Okay, well everywhere you go, you ask the person who is ringing you up if they have any discount they can offer you. Even if they have no promotions going on now, you are a good guy, and they are a good guy, and it would really help you out. It works one out of five times.
Not comfortable doing that? Fine, there are plenty of other ways that you should be negotiating. That is bad money habit to break number one: being scared to negotiate. Call your cell phone carrier and, politely, explain that you are unhappy with your current plan. Can they offer you something better?
Not Paying Yourself First
Next, you pay money for your phone, your car, you home, every single month. Those are expenses that should be there. But the number one expense in your life should be you! You should be paying yourself first, no matter what. This means savings. Every month you should be cutting yourself a paycheck in the form of money going into a high yield savings account. Don’t know what a high yield savings account is – it’s the best place for your savings that accrues far more interest on your money that your standard bank savings account. Check out ally bank and capital one 360.
Not Setting Boundaries Around Your Splurges
How often do you happen upon the most amazing pair of shoes and you just HAVE to have them? How often do those shoes happen to be way out of your budget? My guess is most of the time. Splurges happen every once in a while, and that is okay. But there need to be some boundaries. Set yourself a thirty-day waiting period. If after those 30 days you still must have the kicks, then they can be yours. If in that amount of time, you have moved on to something else, then they were not worth the money to begin with.
Knowing How Much to Spend on What
This is always a tricky question to answer, but there is a really popular guideline that I think helps solve this. It’s the 50/20/30 method. You should spend no more than 50% of your income on fixed expenses – all the stuff you have to pay like rent, mortgage, car payments, savings, utilities and even monthly subscriptions. 20% is reserved for goals like paying down debt, or saving for the vacation home you want to buy in France. The last 30% is for your variable expenses and what I like to now call, funsies. These are day-to-day expenses and things like eating out, entertainment and shopping. If you begin this method you will do a good job of keeping your budget in line. Remember, no matter what, always track your expenses each month to make sure these numbers are within their guidelines.
Paying Full Price to Travel
We actually did a full episode about hacking your travel, so I will just give you a refresher and for more detail about this one, see Episode Number 3. First, when you decide you want to take a trip, you should start saving up all your credit card points or miles for the big-ticket purchase. Second, whether you are going 100 miles away or 1000 miles away, you should negotiate for a cheaper place to stay. The easiest way to do this it to find two places and use them as leverage to get a lower price on the place you really want or have them offer you additional perks. Third, put social media to work for you. Follow or subscribe to airlines and hotels on Facebook and Twitter. That is where they post deals. You can also write to them or tweet them to ask for a deal.
Letting bad interest accumulate on credit card debt
Bad interest is your enemy. Remember my motto be done with debt. Good interest, on the other hand is what you want from investments and hi…