We all have spending habits we could improve upon. Some of the most common spending habits people have are things you might not think about; that daily latte, that daily cab ride, that daily lunch out with girlfriends. We all have our own spending habits and there’s nothing wrong with that; unless our spending habits are leading us straight into the depths of debt. Here are some of the most common spending mistakes women make – stop making them before you’re too far in debt to make it out.
Using Credit for Impulse Purchases
There is a big difference between your credit card to pay for everything you purchase throughout the month to earn miles or reward points and paying off your balance in full at the end of the month and using your credit card to make purchases you won’t pay off at the end of the month. If you are using your credit card to pay for things you can’t afford otherwise, you’re indulging a negative spending habit.
Using Cards Instead of Cash
If you have cash to use to buy that latte, use it. Don’t spend your credit on things you can easily use cash for. It’s a never ending cycle that’s going to lead to debt you’re going to regret someday. Again, however, it’s a different story if you always pay your card off in full each month and only use it in lieu of cash so that you can reap the reward point benefits.
Your savings account is not for new shoes or a last second vacation. It’s for your emergency fund, your retirement or whatever you’ve designated it for. Of course, if you have a savings account designated for “Fun purchases I just have to have at some point” then it’s okay to use that account. However, if you’re using your emergency fund to fund your new Louboutins instead of things that are actually an emergency, you’re going to be in trouble.
(Photo by Brian Killian/Getty Images for Tracy Paul & Company)