Most people concentrate on starting new, healthy habits when a new year is upon them. However, it is just as important to break bad habits as well. If you are wanting to be better off financially next year, below are some costly habits to work towards breaking.
Putting Off Saving For Your Retirement
Retirement may seem like it is too far away to have to worry about, but the longer you wait to build your retirement accounts and savings, the less you will end up having. If you keep putting off getting started, the harder it will be to catch up. The easiest way to begin when you are younger is to put some of your paychecks towards your employer’s 401(k) plan. If your employer does not offer one, consider opening a Roth or traditional IRA with your banking institution. Generally, it is recommended to save around 10% of your pre-taxed income.
Paying Minimum Payments Towards Credit Cards and Loans
Many credit cards require their customers to make minimum payments towards their debts each month. In general, that minimum amount is a small percentage of the balance and will take many years to pay the balance off. In the meantime, you will spend more money on interest. The more you can pay towards your credit cards each month, the less interest you will end up spending while paying off your balances. In the coming year, get in the habit of paying off your balances in full. This will save you from spending unnecessary money on interest and keeps you out of debt.
Spending As Much Money Or More Than You Earn
If you spend what you earn or more, you are considered to be living paycheck-to-paycheck. One emergency or extra bill can send you into debt and further in the never-ending cycle. There is no way to build significant savings or a retirement plan if you are living beyond your means. Look for ways to cut back on your spending in the new year. You will be able to save more money and breathe easier.
Skip Setting Goals
The only way to get to where you want in life is to set goals and work towards reaching them. If you want to save more money for emergencies, set a goal to achieve that. It could be spending less or earning more. If you have to get a part-time job to meet your goals, find one that fits into your current schedule.
Dil Bole Oberoi
