Your finances don鈥檛 crumble overnight. It鈥檚 rarely just one “mistake” that renders you broke or financially stressed. It鈥檚 usually the accumulation of small, seemingly harmless habits that stack on top of each other and erode your finances over time.
Think about it; you鈥檙e walking to work and grab a pumpkin spice latte for $10, then at lunch you click on the “buy now” button for something that was still in your cart from a few days back (it was on sale so you just had to get it). Later on, you stream shows on just one platform, but are still paying for three, then you order takeout when you鈥檝e got food at home because you鈥檙e tired.
None of these actions, in isolation, would crater your financial future, but taken together they could add up to hundreds of dollars a month, which could have gone toward your retirement, and maybe even made you a millionaire at some point.
Here鈥檚 a roll-up of the most pesky habits that fly under most peoples鈥 money awareness radar, and could be ruining your finances, and how to break them.聽
Subscription creep
Gym memberships, weight-loss coaching, streaming services, apps and so on are individually cheap, but collectively a budget drain. Most of us forget we even have them because the costs are super small.聽
Break subscription creep with a monthly audit where you review your bank and credit card statements and cancel what you haven鈥檛 used in 30 days. This is also a great way to bundle smartly such as shifting multiple core subscriptions to a family plan. Or, cancel most, then rotate them. Picking one or two at a time, then switching, can also keep things interesting.
Ignoring small fees
These are things like annual credit card fees, overdraft charges, late fees, ATM fees, yoga mat rentals etc. They all seem minor but dig into your cash flow.聽
Break this habit by switching to no-fee accounts, scheduling payments and automating bills so you鈥檙e never late, and set up balance alerts from your bank so you know when your balances are running low ... and bring your own yoga mat!聽
Meals, drinks and coffees out
I get that this is how a lot of folks stay in touch with friends and family. But too much takeout, especially of the fancier kind, can ruin your wallet (literally rivalling a monthly car payment).
To break this habit, it can help to apply a bit of reverse psychology. It鈥檚 OK to treat yourself to something “special” once a week, and set a limit to something you can actually afford, say $10 to $20 toward whatever food/beverage you want that week. But for the rest of the time, think about meal planning (personally I use ChatGPT to spit out a healthy family-friendly plan for the week, then I ask it for a shopping list). Some people also like to do meal prepping, bulk preparing lunches for the work week, as an example. Have friends over for a potluck, or meet them for a drip coffee versus at a sushi restaurant.
If you stop “ingesting” the money that would otherwise have been savings, you can sock away that difference into investments. Investing $50 a week at a seven per cent rate of return for 40 years, as an example, would add up to nearly $600,000. I鈥檒l bet your $18 salad doesn鈥檛 taste that good after reading that number.
Not paying off your credit card 鈥 especially if you have the money
Of course, minimum payments feel manageable, but interest snowballs, trapping you in debt. The rates on unpaid balances are generally north of 20 per cent, and compounded daily聽鈥 yikes!
If you鈥檝e got the cash flow, pay off your credit cards on time and in full each month. It鈥檚 nonsensical not to do so. If it makes you mad to see your account balance drop, take it as a cue that you need to save more, and set that money aside for a rainy day so you won鈥檛 dip into it.
If you can鈥檛 clear them up, and can鈥檛 consolidate to a lower-cost loan or line of credit, try these debt-crushing techniques:
鈥 Round up payments. Even an extra $20 per week can drastically cut interest. Treat this “extra” as a non-negotiable bill, and automate it.
鈥 Use the snowball or avalanche method. Tackle smaller balances first (snowball) or the highest interest rates (avalanche).
‘Retail therapy’ for stress reduction
It doesn鈥檛 work. Shopping as a mood booster can create guilt and financial strain. It can also trigger further impulse purchasing habits. The real solution to breaking this habit is understanding what鈥檚 happening with your emotions. If you鈥檙e triggered to shop, there鈥檚 something else going on. Pause and reflect on what鈥檚 happening for you. Then try a walk, some exercise, drinking water, journaling, calling a friend; all of these actions are healthy and can deliver relief from anxiety. It鈥檚 also helpful to build a little bit of fun money into your budget, which helps reduce impulsive buying, and puts a smile on your face.
Take things a step further by inserting the 24-hour rule. If you want to buy something non-essential, wait a day. Often, the urge will fade. And unsubscribe from marketing materials, emails with promos, etc.聽
If you find yourself saying things like 鈥淚鈥檓 worth it鈥 but you鈥檙e broke, or 鈥渋t鈥檚 just a small amount of money and won鈥檛 matter鈥 and you can鈥檛 sleep at night, this is your nudge that it鈥檚 time to sink into financial awareness and rebuild your foundation with better money habits.
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