5 Bad Financial Habits You Need To Get Rid Off Before Your Next Pay-Day

End month is almost upon us and as such people can expect their salaries soon. However, by the second week of June most people will be talking about how broke they are. This is because of poor financial habits.

How does one stop the constant cycle of being broke a few days after being paid? In this article find out some of the bad financial habits you need to get rid off before your next salary in order to avoid being broke all the time.

Here Are Some Of The Bad Financial Habits To Get Rid Off Before Your Next Pay-day

1. Lack of proper planning

Sadly most people don’t really think about or plan for their financial future especially young people. This means that people aren’t taking any steps to ensure they become financially secure as they grow older.

Very few 20 something’s think about saving and investing. They spend their salaries as soon as they get them which means, they never have any extra cash.

Most people believe that being wealthy is having a nice car, expensive phone and buying designer things. However, this is a sure way of not getting rich.

Instead of spending your money on these things, one should save and go into wealth creation. Good investments will eventually give you the finances to live a luxurious lifestyle without having to work too hard for it.

Tip

Make a budget and stick to it. Ensure you always put something away to use later on in life. You can then decide what to do with the money.

2. Taking loans to fund a lifestyle

Another common mistake a majority of people make is taking loans to buy things that will not add monetary value or taking a loan to buy something that will not pay back the loan.

A good example is taking a loan to buy a car. As much as owning a car will make your life easier because you get to avoid the hustle of matatus and being rained on, it comes with extra costs.

A car’s value decreases with time and usage so you will sell it at a loss. Owning a car also comes with costs such as insurance, fuel and maintenance fees.

SEE ALSO >>> 5 Signs You Are Living Beyond Your Means

Therefore you will end up using all your money to pay for the loans and for the upkeep of your car.

Tip

Instead take a loan to buy land or a house. The value of land always goes up and if you sell it at a profit you will be able to pay for the loan and make money in the process.

When it comes to houses you can rent out the house and let the money from that pay for the loan and afterwards you will have extra income.

3. Spending your on friends

This is something a majority of people fall victim to. Most people want to show off to their friends or your friends want you to take them out every Friday because you have a source of income.

You will never save any money if you are always spending it on friends and drinks. Therefore it is important that you set a limit on how much you can spend on friends every month.

Use that money you would normally spend out drinking to start a business instead. In the long run this will be a better alternative.

4. Being too comfortable with income from one source

Yes your salary is enough for you right now because you do not have a lot of obligations. However, you will never become rich from your salary alone.

You need extra sources of income. You can have a part time/freelance job or start businesses. Nowadays you can even run an online business and still be able to work full time.

READ ALSO >>> 8 Profitable businesses you can start with as low as 5-10K

5. Poor time Management

What is the point of spending hours playing video games when you could be using that time to do part time jobs or learning a new skill?

A new skill will look good on your CV and part time jobs provide income whereas, video games provide enjoyment for a period of time.

It is not wrong to relax for a few hours but you should not spend the whole day doing nothing. You can take a few hours to relax but then a majority of your time should be spent doing things that enable you to grow.

RELATED ARTICLE >>> 7 Things You Should Do In Your 20s To Be Rich In Your 30s

It is important to ensure that you get rid of these bad financial habits if you want to have a financially secure future where you will get to live a good life.

By Michelle Wanjiku

Do you have any more tips? Leave them in comment section below