Top Techniques on How to Quit Those Bad Money Habits

Top Techniques on How to Quit Those Bad Money Habits
Written by Irina Vasilescu

When it comes to managing your finances, how good or bad are you? Are you the type to create a very detailed budget every month and make it a point to follow it to the letter? Or are you more of an easy going spender and you just worry about the bills once they arrive? Even if you belong to the latter category, remember that a little planning goes a long way.

You’ll never know when a financial emergency might crop up. If a family member needs a trip to the emergency room, what are you going to spend? If the roof of the house needs repair and it’s almost wintertime, where are you going to find the money? If you have funds set aside for such emergencies, you won’t have to worry that much about what the future brings.

Aside from planning, you also need to steer clear of many bad habits associated with managing one’s finances. We are all guilty of these bad money habits. You might have some savings stashed away somewhere, but you persistently put off paying the full balance of your credit card. This is actually a bad money habit that’s counterintuitive, because the credit card balance will earn interest.

So no matter how much money you are saving on the side, you are consequently wasting it by paying interest on your credit card. What other bad money habits do most people commit? Read on to find out.

Revealing Your Top 15 Bad Money Habits & How to Quit Them!

Take a look at the top 15 bad money habits that people have, and the solutions on how they can be avoided:

1. Relying on plastic too much

You have a credit card which you use for purchases. While it’s very convenient and you can use it to rack up points, earn flying miles or gather rewards, there is such a thing as relying on plastic too much. MIT’s Sloan School of Management conducted a research which indicated that those who use a credit card to pay for purchases spend up to 100% more than what they would have paid for the same item in cash.

When your credit card company offers you cash back, miles or rewards, you tend to spend even more. This is precisely the reason why you should limit your credit card spending. Before signing up for a card, read the fine print. Only use a credit card which has a program that you can actually use, before you go all-out in using it for your purchases.

2. Falling for the “Sale” tag

Supermarkets, retails stores and grocery stores all use the “Sale” sign to lure customers in. Here’s a quick guide that you can use:

  • If you see a sign that says you should buy in bulk and save, determine what the unit price is. Do some quick calculations and if it turns out that there is no difference between the unit price of a bigger as compared to a smaller item, the Sale sign is really just a sneaky way to get you to spend your money.
  • Do the same comparison for buy one, get one free or get buy one, get another item at a discount offers. 
  • For the limited time only sales, make sure that the expiration date on the product is still viable. Otherwise, the money that you saved will end up being wasted because the expired product will just be thrown away if you don’t use it in time.

3. Not going comparison shopping

Perhaps the best thing about the popularity of online shops like Amazon is that you can easily go comparison shopping. When buying a gadget or any other product, you can gauge whether one store offers better prices than another and it’s all done in one click.

If you’re the type of consumer who simply relies on the label to determine the price of the product, then you are not trying to save any money at all. Take the extra effort to go comparison shopping and even get product reviews in the process.

4. Popping pricey pills

Whether it’s vitamins, supplements or prescription pills that you are taking, the branded ones will cost you more in the long run. Ask your physician if there is a generic substitution of a branded pill that was prescribed to you. When it comes to over-the-counter medication, generic brands work just as well as the branded ones.

5. Always listening to your wants

This is probably the worst money habit that a lot of people are guilty of. If you keep on caving into your wants without considering what the future has in store, how can you iron out your finances?

Before buying anything, always ask yourself if it is something that you need, or if you are only listening to a want. Even if an item is on sale, you can resist the temptation to buy it by waiting for a couple of days. Once you go back to the store, you might find that you do not need it, after all.

6. Impulse buying

When you’re going dress shopping or grocery shopping, impulse buys are a necessary evil. How can you ward this off?

When going to the supermarket, for example, make sure that you’re not hungry and that you carry a list of the things that you need to buy. When shopping for clothes, take your time and always set a ceiling amount for the budget.

These are a couple of things that you can do to quit the impulse buying habit.

7. Always carrying a balance on your credit card

Don’t make it a habit to carry a balance on your credit card bills because the interest applied will add to your expenses. When you go online, there are tools that you can use to demonstrate how much you are losing when maintaining a certain amount as balance on your card. What’s worse is when you do not pay the amount in full, which will rack up the late fees and interest rates on your bill.

8. Failing to plan for the future

Another big money mistake that a lot of people make is failing to plan for the future. If you’re starting a family, prepare for the kids’ college education. You might also need to save up for a bigger house. As early as possible, start saving for your retirement. Make sure that you have all the insurance plans that you need to secure your future and prepare you for unexpected circumstances.

9. Paying for premium cable and landline services

If you already have Internet connection, you do not need to pay extra for premium cable or landline services. Landline phones are practically obsolete, unless there is another house with a landline phone that you frequently call. As for those premium shows on cable, you can just as easily consume the content through cheaper streaming services.

10. Living off fancy lattes

If there’s a popular coffee chain branch which you pass by on your way to work, you are probably spending too much money buying daily fancy lattes. What you can do is buy your very own coffee machine at work. You can get your caffeine kick at a fraction of the price and the smell of brewing coffee in the morning is a great way to start your day.

11. Ignoring the need for an emergency fund

You will never know what will happen in the future, so it pays to prepare an emergency fund. A job loss, an accident, death or sickness in the family, a ruined car or emergency home repairs – all these are emergency expenses which you need to have funds for in the future.

12. Buying brand new or retail, when you can buy second hand or in bulk

We live in a consumer-oriented world which generated the need for people to gather a lot of material things. These expenses will add up to a lot, especially if you always answer your wants.

In order to cut back on these costs, it does pay to consider buying second hand instead of brand new. Also, instead of buying retail, you can purchase items in bulk – but only after determining if the unit price is lesser when buying in bulk.

13. Using shopping as a form of entertainment

Another bad money habit is using shopping as a form of entertainment. Sure, there are some instances when women need to resort to some retail therapy, but this would cost you a lot in the long run. No matter how dire your circumstances are, never use shopping as a form of entertainment if you don’t want to burn a hole in your pocket.

14. Having an unhappy, unhealthy lifestyle

When you have an unhappy, unhealthy lifestyle, it leaves you angry, stressed and anxious most of the time. This has a negative effect to your emotions and also increases your health risks. If you’d like to save money, start by living a happier, healthier lifestyle.

15. Being too safe with your investments

Finally, if you have investments, make sure to diversify your portfolio. Being too safe means that you are not giving your money enough chance to grow. Read up on the basics of investing, then work your way up from taking small risks to big risks.

By knowing which bad money habits to avoid, you can manage your finances a lot better.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • One habit I have kicked this year is buying coffee out. I usually only buy black coffees but they still cost around 2.50/3 dollars a piece. I have been making coffee at home and it has become a nice routine. I’ve saved a lot of money so far. One tip I could work on is paying off balances on cards earlier. It’s so temping to use them. I try to keep them at home but still make impulse buys every once a while. It’s a work in progress!

    • I’m trying to pay off my balance right now. I’ve been making only minimum payments for a few months and I feel like I am wasting money. That is my focus right now. I feel like having a credit card makes it too easy to buy items that I don’t need. That is one of my bad habits that I need to quit.

      I used to buy coffee out as well. It gets very expensive. At home coffee can taste just as good, and you can get free refills!

  • These are really good tips. I’m trying my best to get out of my “bad money habits”, but it does take some work. I don’t have an emergency fund and I am carrying a balance on a few credit cards at the moment. I’m working on fixing both of these issues. I’m trying to look at the bigger picture in regards to my finances and any tips that I can find are more than appreciated. Thanks for the article!

  • I’ve become so focused financially over the last few years, because the bills have been drilling me in, so I had to find a way to eliminate some habits like spending money just because I know I might have some to spend and thinking I could make up for it at a later point. This is a great list of tips though. Most of them I am already doing and some of them I should start doing.

  • Learning great habits are extremely important. Being human as we are, I think it’s very much about putting in place structures to make it easier to make good choices and harder to make bad ones.

    Leaving your credit card at home, for example, stops you from having to rely on willpower each time you walk into a shop. Derivations of this principle can certainly help eliminate the bad habits.

  • Having ‘bad’ money habits can really put a huge damper in your finances. Thanks for sharing this info. A lot of people don’t realize that their small habits of poor spending can really effect their ability to maintain stability with money. Cutting out a few of these habits and replacing them with more fiscally responsible ones can make a huge difference.

    • Indeed, it’s not until you add all the little things up you can really see how much money you’ve potentially really misplaced.
      And as you said, just replacing some of these bad habits and trying to be more aware and stopping one self before making a bad or unnecessary purchase can truly to wonders for your personal economy.

  • I’m personally a huge sucker when it comes to the sales…

    I’ve spent alot of money on video games for example during the last few years but pretty much every purchase has been on a sale, so I kind of tell myself it’s justified and in a way it is. They’re great, great deals but I guess the question is whether I really wanted the product or if I just fell for the sale tag.

    I’m however in no debt which is good, but I’ll still take some of these tips with me in the future for sure!

  • I would argue that being too safe in your investments is actually a good thing. Even the safest, blue chip stocks put out steady and substantial dividends if invest a decent amount. Investing in moderate risk stocks are for those who want to earn a living doing risky investments. Always remember to spread out and diversify your investments to prevent a major financial disaster.

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