10 Bad Spending Habits and How to Overcome Them

It's easy to fall into the trap of disorganized budgeting, or even no budget at all. Ideally, you should have a clear, concise budget for bills, savings, investments and spending cash. The more you pay attention to your budget, the better you can manage it to avoid falling into debt. The following examples of common spending problems each have simple solutions.

1. Getting too tight with the budget. You need to avoid setting strict rules to the point you cheat. One way to accomplish this is to cut back in one spending area at a time.

2. Scavenging for coupons. You’ll be surprised how much money you can save by putting in a little effort to finding coupons.


3. Buying new products instead of exploring options. You can get some things free by swapping items with friends.

4. Forgetting about your credit score. It's a good idea to know your credit score at all times and work on improving it. Websites such as AnnualCreditReport.com provide free credit reports.

5. Lacking knowledge of finance basics. If you do not understand budgeting, you should consider enrolling in a finance course.

6. Keeping too much money in savings. You are better off investing some of your savings in other financial instruments, such as an IRA, that generate a better return.

7. Not paying down credit card balances. By letting debt linger you run the risk of paying much more over time and hurting your FICO credit score. Try to pay down credit card debt as quickly as possible.

8. Failing to establish a household budget. In order to save and spend effectively, you need to plan ahead and set rules for how you manage money. Most importantly, stick to them!

9. Buying out of convenience. Instead of making a trip to the local grocery a spontaneous activity, try planning ahead on when to go. Keep track of how much money you spend each trip.

10. Impulsive shopping. Going into a store without a shopping list can lead to buying last minute items that you didn't plan to buy. Sticking with a list will help you cut down on this problem. Also, never go to a grocery store on an empty stomach.