Bad Money Habits That You Need to Break to Build Wealth

Every day, you make choices that affect your personal finances and long-term goals. There are bad habits that may look small and insignificant like eating out or impulsive buying.

However, they can sabotage your goal towards financial independence. The only way to build wealth is to gain control of your spending habits and develop positive habits that will push you in the direction you want in life.

Below are some money habits that you should break to build your own wealth and tips to help you get out of them:

#1- You do not make savings as your priority.

Pay yourself first as soon as you receive your paycheck. Saving what is left is wrong. Assign a specific amount for your savings fund and consider it as one of your essential expenditures. You will be more motivated when your egg nest grows each month.

#2- You do not track your expenses

Tracking your expenses diligently helps you achieve your financial goals. It shows you where the money goes and how much you are spending on non-essential purchases. It helps you cut back spending on things that are not your priority.

#3- You keep making excuses.

You always try to justify your spending habits with perfect excuses. Stop it now. Do not let those excuses keep you rooted in your current financial state.

#4- You are living beyond your limits

To afford things that are expensive and luxurious, you use your credit cards to pay for them. Eventually, the interests that pile up can put you in debt trap. To get out, learn to manage your personal finances and live within your means.

#5- You are afraid to invest

Investments are vital aspects to build wealth. Do not be afraid to invest your money to secured investment plans such as property, bonds, insurance, and a lot more. Rich people become richer by investing.

By breaking these bad habits and replacing them with positive habits, you will be amazed how your personal finances improve. You will be a step closer to achieving your financial and long-term life goals.

On Personal Finance: When Should You Best Get a Loan?

A personal loan is an unsecured loan that yields high-interest rates. As much as possible, a personal loan or any kind of loan is discouraged unless you have enough resources to pay for it full in the future.

Personal loan is very convenient in nature as you can easily apply for it and approved without any collateral being required.

But same as any other loan or debt, this can become a burden in the future if not properly managed. Below are a few recommended reasons when we should decide on getting a personal loan.

Debt Consolidation – having debts that have been taken with different institutions, especially credit card issuers, can cause your interest rates to become so high that all you can pay off every month (or other terms of payment) is the minimum amount due.

In these cases, taking on a loan to pay all your debts can help lessen the interest rates that are being paid.

A good tip when taking this action is to look for a personal loan offered by institutions which have smaller interest rate compared to average interest rates of all your debt if you continue to pay for them status quo.

Purchase – a flexible loan can be used to make a large amount of purchase like a car or a house where the borrower does not want to put the goods being purchased under a collateral. This is most advantageous to the borrower.

Unlike other secured loans such as a mortgage loan, it allows the borrower to get the loan unsecured without being required to place the property under the lender’s control.

It also gives the borrower to use the money other than restricting the use of money on a specific purchase of goods.

Events and Leisure – there are times that the cost of events and leisure like weddings and travel vacations can prove to cost a lot of money even for someone who has enough financial resources to pay for these.

Some would find it more beneficial to acquire a personal loan to cover the costs rather than disposing a large amount from their savings.

An online cash loan comes conveniently for the purpose of having extra cash to address any purpose or need a borrower may want to use it with.

Travel Insurance Saving Tips

When you travel, you want to maximize the budget and enjoy your destination. So, you look for ways to find the most affordable insurance that will provide the cover you need. Here are some tips for you:

#1- Select the insurance plan that works for you
There are 3 levels of travel insurance travel that you can choose from- basic, medium, and comprehensive. As the cover increases, so is the cost. Consider the following before choosing the plan:

  • Budget- How much are you willing to pay?
  • Need- Aside from essentials like trip cancellation and medical expenses, other benefits depend on your travel plans and personal circumstances.
  • Comfort- If you feel okay with the basic cover, go for it. If you want to avoid potential risks, choose a comprehensive policy.

#2- Avoid unnecessary options
Tailor suit your insurance to fit your travel plans. It may require you to add optional
covers that will provide you maximum protection like high-value personal items cover,
winter sports cover, golf cover, adventure sports cover, and rental car excess cover.

#3- Refrain buying from an airline or travel agency
It is convenient to buy a travel policy when you book your flight. However, you will be paying more than the actual premium. Travel agents can be 2 ½ more expensive while airlines are 3 times more. So, go directly to a travel insurer.

#4- Check out travel insurance discounts
Many travel insurance agencies give seasonal special offers that can save you a lot of money. Take advantage of coupon codes and promos, multi-policy discounts when you buy another kind of cover, discounts for online buyers, and discounts given to special members or customers. But, always check the features of the discounted policy if it suits your travel needs.

#5- Opt for a multi-trip insurance policy
If you travel most of the time, consider buying a multi-trip policy that provides cover year- round. The limit applies to your maximum stay every trip but gives you the same benefits of the single-trip policy.

#6- Combine your policy with your travel friend
Get a combined cover with one policy if you are traveling with family members or friends. Agree on the level of policy cover to save money.

Finally, be honest. Disclose everything especially your pre-existing health issues to avoid cancellation of your insurance or claim refusal. Be wise too!

Breaking the Impulsive Buying Habit

Mall or online shopping can be addicting, and many succumb to the temptation. The easy access to online stores makes shopping more convenient. Clicking the “buy” button encourages impulsive buying which can put a big dent in your personal finances.

There are two reasons why people buy on an impulse:

1. Stress – Many people consider it as a stress-buster or stress-reliever. They love to window shop and find something that uplifts their spirits.

2. Lifestyle – Some people love to shop for what’s new and what’s hot. They shop the latest brands to be “in” fashion.

How do you break the habit of impulsive buying? Here are some suggestions:

#1- Pay in cash.

Stop using your debit or credit card. Usually, paying with cash limits your spending.

#2- Make a shopping list.

Before going out to mall or grocery stores, create a shopping list. Stick to the list and your budget. It will eliminate little impulse purchases. Make a habit of planning. Rank your priorities according to necessity.

#3- Create a 30-day waiting period.

This practice will keep you from making an impulsive purchase. If the infatuation for the item is still there after the waiting period, you can buy it.

#4 – Calculate the value of the item in terms of your life energy.

Divide the price by your hourly wage. The answer will show you how many hours you will work for the item you want to buy.

#5- Ask yourself before making a purchase.

  • Will the purchase significantly improve your life?
  • Does it meet your particular life goal?
  • Does it make you feel better?
  • Will it ease or simplify your daily living? Be honest with yourself.

At the end of the day, always think of how your spending affects your long-term personal finances and life goals. Always keep your saving goals your top priority and ask yourself if the purchase will affect it.