What
are bad money habits in the first place? You don’t have to look beyond. Check on your own
money habits! I used to be guilty of a few of these things and I hope my kids wont fall into prey of these financial sins:
The
first checkpoint is your spending habits. Prepare a spending plan (or
budget). Discipline yourself to track your expenses for at least six
months. When I started recording my expenses, it was such an ordeal and
drudgery; but when I was able to reach six months, it became a habit
that I have become uncomfortable if I don’t jot down my cash flows in a
small notebook which I carry all the time.
“If you buy things you do not need, soon you have to
sell things you need.” What a great reminder from Warren Buffet to put our buying habits in
check. Instead, we should buy the things we need most- insurance and healthcare protection.
Sometimes,
or in fact, most of the time, our buying behavior has a psychology
behind it and documented in the Bible. Ecclesiastes 4:4: “I have also
learned why people worked so hard to succeed: it is because they envy the things their neighbors have. But it is useless. It is like chasing the wind.”
Now discover for yourself your buying motives by asking these questions: Do I really need it? If not, Whom am I trying to impress? Advertisements are designed to cultivating the idea that our self-worth and success depend on what stuff we have.
Acquiring
things through credit cards t is tantamount to spending money we
don't have. In my buying decisions, I subject myself to this self test before
committing a purchase, especially a major one. These may apply to you:
Answers
to these questions will help differentiate impulse from well
researched purchase. Before deciding to a purchase, beyond its nominal
price, think of its value in terms of the number of days you need to
work to acquire that item. Is it worth it?