Knowing what not to do financially can be the most powerful new year’s advice you will get. Are you looking for new ways to pave a path to financial success? Be sure you’re not succumbing to the most common unhealthy habits in our culture, starting with those listed below.
Mistake #1: Ditching Your Financial Resolutions
We all start the year with the best of intentions. This time, try keeping a more sustained eye on those related to money. The reason so many people ditch their resolutions by day three is because they fear that keeping them will be too difficult. The way out of that mindset? Break down your goals into smaller pieces.
If “pay off debt” is at the top of your list, set those long-term goals aside and make a separate list of smaller, more achievable ones. Instead of listing actions that will feel overwhelming, write down two or three things you know you can do today. Print out your household budget for the month. For inspiration, download an educational audio book from your library on combating inflation at home. It’s important to think of steps that are achievable to maintain a proactive frame of mind.
Mistake #2: Too Much Eating Out – And Drinking Out
The average American spends thousands of dollars a year going out to lunch, a meal that is always cheaper to make at home. You can still plan nights out with your pals and occasional lunches away from the office. Just be mindful about it and plan in advance how you will approach eating and drinking expenses. Take a thermos of water with you to avoid paying for soda. Bring a sack lunch to a nearby spot where you can enjoy it on your break, away from your work space.
Once you know how much you’re spending – and saving – on these types of outings, you can schedule in drinks and meals in a way that is more mindful and money-wise.
Mistake #3: Using Too Many Store Credit Cards
Don’t you love it when you’re about to make a purchase, when the store clerk lets you in on a secret. You can save a whole bunch of cash if you simply take out a credit card on the spot. Easy peasy, right?
Except for one thing. The typical APR of store credit cards is over thirty percent, according to Bankrate – significantly higher than with regular credit cards! What that means is there are even more dangers in keeping a balance on store credit cards than the usual risks, which are already numerous:
- High interest rates
- Ease of spending money you don’t have
- Silently accruing more debt
- Confusing financial terms
- Steep fees and penalties
Trying limiting your credit card usage in general. Only use one if you must and can pay off the balance within two to three months.
Mistake #4: Falling for First-Time Buyer Discounts
You know the saying: If it seems too good to be true, it probably is. Nowhere is that saying more apt than when someone tries to talk you into a financial commitment that is not in your best interest. The store will always want to make up that first-time discount they’re offering later on. And they usually do, which is why they offer credit cards in the first place. If they didn’t make money off of shoppers taking out those cards, those first-time buyer offers would not exist.
Mistake #5: Getting Too Comfortable with Store Returns
One risk that is on the rise is that of the (supposedly) easy return on purchases. Now that online shopping is the norm, try not to buy anything if you think you might want to return it. This habit is costing shoppers millions of dollars a year. Just because the websites let you do it doesn’t mean you should.
Mistake #6: Falling for Money-Saving Incentives at Points of Sale
On a similar note, company websites commonly lure customers with points clubs and other incentives for saving money at points of sale online. Be skeptical; in most cases, you don’t want to take the bait. These tactics typically require handing over sensitive financial information, as well as signing online contracts that no one reads. You are better off avoiding these types of shopping incentives.
Mistake #7: Delaying Paying Off Your Debt
Higher credit rates and easy access to goods makes problems like credit card debt inevitable in our society. That doesn’t mean you can’t start paying it off, one piece at a time. Getting a prepaid debit card through a Yes! Debit™ account might be able to help. Available at CFSC Currency Exchanges, these cards can be used at ATMs and only allow you to spend what you have.
Prioritize buying only what you need and start taking steps to deal with any lingering debt this year.
New Year’s Solution: Get Yes! Debit™ & Other Assistance at CFSC Locations
Kick off a healthy new year by using financial services to keep your spending in check. In addition to Yes! Debit™, our many Currency Exchange locations provide services to help you track and organize a wide range variety of routine expenses:
- Prepaid cell phone services
- Electronic money transfers
- Check cashing
- Electronic bill payments
- Various auto-related services (available at select locations in Illinois and Wisconsin)
Check out your nearest CFSC location to get started today!