It’s a new year, and what better time to take control of your finances?

When it comes to mastering your money, it’s all about habits. And breaking bad ones is just as important as establishing good ones. You can’t get ahead by taking one step forward and two steps back. 

So are you ready to crush your financial goals? Break these seven bad money habits in 2023 to move forward with your finances.

1. You Spend Everything You Earn

You must learn to spend less than you earn. Nothing else matters without breaking this bad money habit.

When you spend every cent you earn, you leave yourself without a buffer to cover unexpected expenses. When one of those expenses inevitably arises, what do you do? Fall back on credit, which comes with interest charges. When you get caught in this downward spiral, you can forget about experiencing financial security or saving for your goals.

2. You Don’t Have an Emergency Fund

According to 2020 results from Bankrate’s annual survey, an alarming 38% say they would have to borrow the money to cover a $1,000 unexpected expense [source]. When you don’t have money in the bank to cover unexpected expenses, you leave yourself vulnerable to going further into debt and paying interest.

Focus on saving three to six months of living expenses in your emergency fund. If you lose your job, your emergency fund allows time to find another one without risking financial disaster. If you have to, start small. Even $1,000 will give you a buffer to cover an emergency and avoid the credit trap.

3. You’re Not Tracking Your Spending

When you don’t track your spending, it always feels as though you never have enough. PSA: Your spending strategy cannot be based on your gut. To grow your wealth, you must track your spending. 

But it doesn’t have to be an exhausting chore. Try downloading a free budgeting app, log your purchases as they occur (it’s easy to do when your budget is on your phone), and you will quickly ID where you are overspending.

4. You Overspend on Groceries

Food is the third-largest expenditure for American households and can account for more than 10% of your income [source]. Because it takes a large chunk of your money, follow this advice so that you don’t spend more than necessary:

  • Write a grocery list and stick to it (no more spending money on fun snacks you don’t need).
  • Try meal prepping. Cook dinner with the intention of having leftovers.
  • Say no to processed foods and make the switch to these pantry staples.

5. You Spend Too Much at Restaurants

Eating out just once a week can wreak havoc on your budget, so something needs to change. Thanks to grocery stores carrying a greater variety of foods, you can bring the restaurant experience home … and skip the high prices of the appetizers, main dishes, soups, drinks, desserts, and tips.

Try Something New at Home

Try this hack: Ask Siri or Alexa to find a recipe from your favorite restaurant chain. With so many great recipes on the internet (thank you food bloggers/online chefs!) you can prepare food that I can guarantee tastes better than any chain restaurant. Go for the recipes that have lots of comments and 5 star raitings.

And, you can always call up a YouTube video for inspiration or to teach you a new cooking technique. Stock up on a few culinary tricks, and it will be so easy to skip restaurants so you can keep more of your money.

6. You Overspend When Shopping Online

The internet makes online shopping quick, convenient, and contactless. But, without the right tools, it’s easy to overspend. Online stores don’t want you to do comparison shopping. Lucky for you, gaining intel on what others charge is a breeze with a free browser extension.

7. You Waste Money on Cheap Products

There’s a fine line between being frugal and being cheap. When you buy cheap, throw-away products when you should be buying quality (think shoes, work clothes), it’s easy to waste money. Instead of looking for the cheapest option, choose products with excellent reviews from reputable brands. Then, use money-saving tools to find a reasonable price. You might pay more now, but your purchase will last and save you money in the long run.

Save More Money! Read these next…

  1. These are the Habits Keeping Your Poor
  2. The 7 Money Lessons You Wish You Learned Growing Up
  3. 5 Things Even Frugal People Don’t Buy

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*Capital One Shopping compensates us when you get the Capital One Shopping extension using the links we provided*

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