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We are all guilty of ignoring our financial picture and falling into bad money habits. But, if we aren’t careful, those bad habits are going to have consequences that will haunt us for a long time. By the time we realize it’s happening, it is too late to do anything about it. So, in the new year, here are 5 bad money habits you should resolve to break.
Bad Money Habits to Break Now
Spending Everything You Make

This tends to be the bad money habit most people have. They spend everything they make and don’t think about the future. Therefore, nothing is set aside in savings for future goals like retirement, large purchases like a home, or even smaller, yet significant goals like a vacation. Worse yet, there is nothing set aside for emergencies which is why, when the unexpected happens, we go further into debt. Make it your mission this year to change this habit. Start small and set aside $25.00 from each paycheck and go from there. Just getting into the new habit of saving, no matter how small the amount, is your main goal.
Using Credit Cards Excessively
Using credit cards excessively really goes along with spending everything you make. You spend all your own money and then turn to credit cards to spend even more. The next thing you know you have dug yourself into a hole that takes double the work to get out of. Now, I am not saying that using credit cards is bad. They are great, in small amounts, to help establish credit and help your credit score. But they must be used responsibly. You should never put more on your credit card than you can pay off in the same month. So, essentially, this means you are still spending within your means.
Not Having a Budget
The next bad money habit to break is the habit of not budgeting. Budgeting allows you to see where your money is going and how much you have left over so you have a clear financial picture. You can’t plan for the future, pay of debt quickly, or know how much you can save if you don’t budget. I started the habit of budgeting years ago and my system, The Fab Life Budget, is one that has worked well for me. I take the time every few months to review my budget and plan out my paychecks and then I just follow the system. I highly recommend looking into my system or developing a system that works well for you. The easier and less complicated you make it, the more you’ll stick with it.
Not Tracking Your Expenses
Not tracking your expenses is another bad habit you should break. It goes hand in hand with budgeting. While your budget shows where your money goes on a monthly, weekly, or, in my system, per paycheck basis, tracking your expenses gives you a more detailed picture on where your money is going. It’s impossible to stick to your budget if you don’t track all your purchases. Further, it is easier to spot fraud if you are tracking. I wrote a whole post on this very subject that you can read here: Track Your Expenses for a Better Financial Life.
Not Reviewing Your Financial Situation on a Regular Basis
Finally, the last bad money habit you need to break is the one where you don’t review your financial situation on a regular basis. If you want to be financially successful (and that doesn’t mean just making lots of money) then you must review your finances regularly. Take the time to review your budget and see if there are things you are wasting money on. Review your transactions over weeks, months, or years and see if there are things you can cut out. During one of my reviews, I looked at my transactions for the last year. The amount of money I had been spending on eating out hit me like a ton of bricks. I immediately felt the urge to eat at home more and started doing so. Sometimes it takes seeing the actual numbers to help you change your habits and make better choices.
Only You Are Responsible for Your Financial Life
Your financial life is your own. If you break the bad money habits now and create good habits, you will be much better off. It can hurt at first especially if you are not used to any sort of control in this area. But once you put the habits in place and, hopefully, make them as easy to follow as possible, you will find that you actually have more freedom.