The Finance Blogger


Bad Money Habits and Getting Rich

Bad Money Habits and Getting RichHave you ever wondered why someone you know seems to have a lot more money than you? Do your bad money habits and getting rich counter act against each other? You make about the same amount of money and you have raised the same number of kids etc. They always seem to have cash available to go out to dinner or to go on trips. Yet you are struggling to make ends meet and pay the bills. There is a potential reason for this difference. It comes down to bad money habits.There are lots of bad money habits that we all have. But there are a few big ticket items that might be the cause or are getting in the way of your wealth health.

Bad Money Habits and Getting Rich

Update your Savings Rate – Always save for a rainy day and in particular your retirement. As your income goes up so should your savings rate, since your expectations are also going up at the same time. Many consumers only save when they have extra cash or keep their savings rate the same throughout their lives leaving a big hole in their retirement plan.

Buying too Much House – leads to higher costs in terms of taxes, utilities, maintenance and repairs. Yes it will likely increase in value and you will be able to sell and downsize at some point. Do the math? Are you placing your savings or retirement at risk? Strike a balance between savings rate and affordability when it comes to buying a home.

Missing Tax Benefits – This can be cash in the bank, but consumers miss all kinds of tax benefits both at work as well as on their personal tax reports. Hire an accountant at least once to determine if you can decrease your tax paid and take advantage of the benefits offered by your employer or the government.

Conservative Investing – placing your money in GIC’s is very safe and very conservative. With today’s interest rates, you are actually losing money when you invest in a GIC. Between inflation and taxes, you are not making enough money to cover these two expenses.

Shopping on Impulse – buying something you do not need on impulse is just plain expensive and eats up cash. All of this money can be placed in retirement savings to provide you with a quality of life that will be the envy of many people in retirement.

Paying too Many Bank Fees – actually fees of any kind that are repetitive and expensive suck your cash flow away. Evaluate all of your utility costs, your bank fees and any area that your spending money on. Take action to reduce those fees to a minimum.

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