Even though we hate to admit it, everyone has a habit of financially indulging in things they don’t need. Whether it’s a regular morning latte or a daily expensive salad at your favorite eatery, consider the gradual effects that spending on pricey items is having on your wallet. While a dollar here and there might not seem much, they’ll all eventually add up. Valley Federal Credit Union offers great services to help you keep your finances in line. Read on to learn about a few financial habits that could be troublesome in the long run.
Kick those bad habits away with VFCU’s great financial services, such as our FREE checking accounts!
Bad Habits Can Cause Debt
The average amount of household debt sits at a frightening $15,191, with Americans owing over $854 billion to credit card providers. Poor financial habits are to blame for this. By keeping a close eye on your spending habits, you can track and reassess the way you’re spending money. A great way to track your transactions is through our very own mobile app that offers the convenience of up-to-date information regarding your account.
Out of those who are mired in debt, most buy everything they can get their hands on, regardless of the price. Impulse buying can lead to some serious and frightening spending habits:
- Early adopters (those who buy the latest in gadgets upon release) usually justify a need for spending money. They allow themselves to overspend and come up with reasons as to why it makes sense to them.
- Using a credit card for impulse buying is another scary way to surely drive yourself into debt. By buying things you can’t afford with credit, you’re slowly racking up debt and higher APR charges.
- Even the most diligent budgeter can lose track and buy something that isn’t needed every now and then by not keeping their finances in mind.
Develop a plan to combat spending without thinking. While impulse buying might not leave an immediate impression on your finances, the habit that it forms will. Come up with a mantra for yourself that will encourage you to second guess whether or not you really need whatever it is you’re buying.
Using Credit for the Points
Always read the fine print when using a rewards-based credit card. Most have annual caps and higher cash-back rates for limited purchases for groceries and gasoline. Sadly, you might not be getting back as much as you think, and going deeper into credit card debt for points is just not worth it. Instead of a credit card that gives you rewards for spending, consider a checking account with rewards. VFCU’s Star Checking Account has perks such as travel, entertainment, insurance and warranty benefits.
Financially Competing with Others
When friends and neighbors seem to have it all – the nicest house, luxury cars or new-age gadgets – the drive to compete can overshadow your sense of spending wisely. Competition is a psychological trigger that can cause spending against someone who has something you don’t and leads to overspending. When some try to measure up to others, it can threaten your financial goals.
Spending to be Happy
A mood-based spending spree is something everyone’s done. Just like exercise and eating chocolate, shopping and finding great deals makes you feel good. Spending money to better your mood will create a link between buying things you don’t need and happiness – and it’s a link that’s hard to break. Check your emotions before you buy. Before swiping your debit or credit card, ask yourself if what you’ve bought is something you really need.
A Financial Institution You Can Trust
Spending habits vary from person to person. The most important step is recognizing that there is a problem with your spending behavior. If you constantly look at your finances and wonder where all the money is going, it might be time to stop and reassess your spending habits. Visit us any time for services that can help your finances stay in the green. Visit our credit union in Brownsville today to get started.