Top 8 negative habits holding you back

As part of LSH, really identifying what's going wrong with your finances is an important part of being in control of your finances. Check these top 8 negative habits, and evaluate whether these are causing you stress and losing sleep. We've added synonyms and phrases that highlight the negative habit in different ways.

1. Habit of Living Beyond Your Income

   Synonyms: Excessive spending, overconsumption, living paycheck to paycheck

   
   

   Spending more money than a person earns is a surprisingly common nightmare situation. A Nerdwallet survey found in the U.S. nearly 83% of those surveyed overspend (Marder, 2023). This includes allocating a significant portion of your income to non-essential items or lifestyle upgrades. This habit often leads to debt accumulation, financial stress, and an inability to build wealth or save for the future. If you spend all your money, you won't have any to save and invest!

   
   

2. Habit of Impulse Buying

   Synonyms: Spontaneous purchases, impulse spending, on a whim, I just have to have it

   
   

   Making unplanned purchases on a whim or without consideration of the budget, the necessity, or the affordability of the thing is an easy negative habit to fall into. Impulse buying often results in wasted money, cluttered homes, and buyer's remorse.

   
   

3. Habit of Debt Accumulation

   Synonyms: Debt burden, indebtedness, borrowing habit, paying less than the full balance

   
   

   Relying excessively on credit cards, car loans, or other forms of borrowing to finance lifestyle expenses or purchases will likely lead to debt accumulation. Accumulating debts (e.g., not paying the full credit card balance every month) leads to living beyond one's means. High debt can lead to financial instability, high interest payments, and long-term financial strain. You're paying more for what you bought!

   
   

4. Habit of Neglecting Savings

   Synonyms: Insufficient saving, savings gap, failure to save, why save when I can live more now

   
   

   Failing to prioritize saving money for emergencies, future goals, or retirement is a precarious situation. Neglecting savings leaves individuals vulnerable to financial shocks, limits their ability to achieve long-term objectives, and can lead to dependence on debt during times of need.

   
   

   Life does happen, and it can cost a lot to fix! Without an emergency fund, individuals may resort to high-interest debt or experience financial hardship when faced with unforeseen circumstances such as job loss, medical bills, or car repairs.

   
   

5. Habit of Ignoring Budgeting

   Synonyms: Budget neglect, fiscal disorganization, financial neglect

   
   

   Failing to create or adhere to a budget to manage income, expenses, and savings is ignoring your budget. Your budget is trying to protect you! This habit often results in poor financial decision-making, overspending, and difficulty tracking where your money is going.

   
   

6. Habit of Avoiding Financial Planning

   Synonyms: why bother planning, I'm doing fine, financial indifference

   
   

   Neglecting to create a financial plan or set specific goals for the future, is avoiding planning your finances. Avoiding financial planning can lead to aimless money management, missed opportunities for wealth-building, and uncertainty about one's future.

   
   

7. Habit of Short-Term Thinking

   Synonyms: Myopic perspective, immediate gratification, present-focused mindset

   
   

   Prioritizing immediate wants and desires over long-term financial security or goals is a form of short-term thinking. Short-term thinking can lead to impulsive decision-making, neglect of future needs, and a lack of preparation for retirement or major life events.

   
   

8. Habit of Financial Procrastination

   Synonyms: Delayed financial action, avoidance behavior, postponing money matters

   
   

   Putting off important financial tasks such as paying bills on time, budgeting, saving, investing, or addressing debt are examples of this habit. Financial procrastination can lead to missed opportunities, increased financial stress, and difficulty achieving long-term financial stability.

These financial habits will negatively impact your financial health, leading to debt, and barriers to achieving your short and long-term financial goals. Recognizing and addressing these habits is crucial for improving your well-being and building a solid foundation for the future.

To your success.