Look at your financial habit very well to determine what it’s costing you. You will be surprised to find some habits you can change in order to save more money and at the same time keep life going.
There are personal habits that eat deep into your pocket, which may as well not have negative impact on your financial health if you do away with such habits. They consume a lot of money which you can change, and consequently direct the money you saved from that towards achieving other important goals.
Experts say it is important to continually improve your understanding of your finances, and how to best manage them. If you are looking for a way to change your financial habits, change the way you think about money they said.
According to Miriam Caldwell, personal finance specialist, one of the most difficult things you can do is to change your habits. Often the best way to do this is to completely start over in a new situation, like at a new job or move to a new town.
She says when you are struggling to change your financial habits it often takes something big to open your eyes and really commit to the change. It may be skipping your first payment or bouncing your first check that finally gets you to wake up to the seriousness of your financial situation. You may think that you are doing well financially, but not realise how much you are paying in hidden fees and costs. Caldwell has come up with ways you can know how much you are paying in fees and interest each month.
One of such ways is to take out your banking statement and look at the amount you are paying in fees to your bank. This would include the monthly service fee if you have one, the ATM charges, and any overdraft charges that you have incurred. If you did not pay any overdraft charges this number may be fairly low, but it you may still want to shop around to see if you can lower the amount you pay. If you paid overdraft fees the numbers can add up quickly. It is essential that you begin balancing your checking account on a daily basis and get out of the overdraft cycle.
Secondly, take out your credit card and loan statements. The new credit card bills should show you how much you pay in interest each month. They should list how long it will take you to pay off the card if you were to pay only the minimum payments. It should also show how much you would save if you paid it off in three years’ time. Another figure you should look up is the interest you are paying each month. This should be at the top of your statement. Total the amount that you pay in interest each month on all of your debts. Think about what you could do with that money if you did not have to pay it. Think about what you could do with the entire amount you pay to debt each month if you were debt free.
You need to look at any late fees you have had to pay in the last month or even year. This number can add up quickly, and late credit card payments lead to higher interest rates that can affect any of your credit cards. How much have paid for being late or careless in how you may your payments? You need to begin working on catching up on late payments, she says.