How to Quit 10 Bad Money Habits That Rob You Blind

It’s not uncommon to find old, counterproductive habits undermining your savings progress. Here’s how to change them.

Our good habits carry us along almost effortlessly. That’s positive. It lets us focus on the things that need our attention most.

But as you work to pay off debt, save and get your financial life on track, you’ll probably find some old, counterproductive habits undermining your progress. They may have worked once, but now they’re holding you back.

Dropping bad money habits makes it easier to power up your financial life. Following are 10 bad habits, and tips for ending them.

1. Carrying a credit card balance

Carrying a balance on a credit card is like walking down the street with a hole in your wallet and your money leaking out.

Here’s why: Suppose you decide to pay off a $5,000 balance on a card charging 15 percent interest. If you only pay the minimum amount each month, it’ll cost you at least $7,000 in interest and take decades.

Think what you would love to do with that $7,000.

Build a better habit: One approach to erasing the card balance is to devote every spare penny to getting rid of it. If you have other pressing debts, you’ll need to make a plan for dealing with all of them. Here’s how to kill your debt and write its obituary.

Keep the balance from building again by making it a new habit to pay off the entire bill every month — no exceptions ever.

2. Failing to fund a retirement plan

There are compelling excuses to put off saving for retirement. But none will matter if you reach retirement age with little saved. And, if you don’t take advantage of your employer’s matching contributions, you’re passing up free money every month.

Build a better habit: Imagine yourself at age 70. Or 80. Picture concrete details — how you’ll look, your surroundings, how you’re spending time and who is with you. The more real your future self is to you, the more likely you are to care for her or him today.

Start paying close attention to your retirement savings. If you can’t bring your plan’s monthly contribution up to your goal immediately, increase it by 1 percent a month. Once a year, check the performance of your investments and rebalance your portfolio.

Here are three online retirement calculators. Play around to set a goal and start saving aggressively:

3. Not shopping for monthly services

Hopefully, you comparison shopped before signing up for insurance policies. Same thing with phone, Internet and cable service.

But you may be missing savings if you’re not checking prices again once a year.

Build a better habit: Put some energy into improving your financial life. Once a year, spend 30 to 60 minutes price shopping for monthly services. To make it easy, keep a list with each company’s name, your account number and your monthly payment amount.

4. Paying for cable and landline phone

Cable prices are going nowhere but up. Free and cheaper alternatives make experimenting worthwhile. But will you get out of your rut and try something new?

Build a better habit: Before trying a change, just observe yourself and your habits. Record your viewing habits for a week or two to see how and if you’re using the services.

Ditto for your landline. If you’re able, drop the landline and use mobile phones only. If that seems too radical, refrain from using the service for one month — or even just a week — while you check out alternatives.

Some possibilities:

  • Drop the premium cable tiers; learn to love basic.
  • Find out if you’ll pay less by bundling Internet and phone services with one company.
  • Get an all-inclusive mobile plan with unlimited text, data and phone.
  • Switch to Skype, Vonage or another cheap or free Internet phone service. Don’t be scared of the new technology. It’s easy to use.
  • Cut the cable and substitute sources like YouTube, Hulu, Netflix, Redbox and DVDs from the public library.
  • Try a free Internet service.
  • Find lots more tips at “3 Steps to Cut Your Cable Bill 90 Percent.”

5. Ignoring coupons and deal sites

If you aren’t using coupons and checking daily deal sites, you’re spending too much. However, exercise discipline when bargain shopping so you don’t sabotage your good intentions with impulse buys.

Build a better habit: Tackle bad habits in small bites. Try just one deal or coupon site. Money Talks News deals, for example, has new sales and coupons every day on clothes, shoes, electronics, tools and more.

Try one of these:

  • Check daily deal message boards like Slickdeals, LivingSocial and Woot for cut-rate prices.
  • Explore grocery store apps that deliver coupons and personalized savings to your computer or smartphone.
  • Grocery store receipts often have printed coupons.
  • Manufacturers’ websites often have coupons.

6. Playing investing too safe

Safe investing is important. But there’s safe, and there’s too safe. Keeping all your money in no-risk accounts means inflation will rob you of spending power slowly but surely.

Build a new habit: Don’t break all your bad habits at once. Pick one and focus. For instance, make managing your investments a priority. Learn your investing style by taking an online risk-tolerance quiz. Next, read up on the basics of investing. Then — taking your age and risk tolerance into account — take another look at your investments.

Money Talks News founder Stacy Johnson tells how to invest in a mutual fund and how to get started in the stock market.

7. Getting hooked on lattes

That $4 latte is killing your budget. One latte a day each workday adds up to $20 a week — $1,040 a year. If you tip a dollar each time, you’re spending $1,300 a year. There’s surely something you’d rather do with that $1,000.

Build a better habit: Substitute new habits you enjoy for the old ones. A latte is a way of treating yourself, so find treats that don’t bust your budget.

8. Living without an emergency fund

If you don’t have an emergency fund, your life is a high-wire act with no safety net. Emergencies are inevitable. Life is full of them.

Build a better habit: Make a commitment to the change you want. Write it down and put it where you’ll see it and allow it to reinforce your resolve. Keep the change at the forefront of your mind and tell yourself continually: “I can do this.”

Commit and watch your savings build. If necessary, take on a few hours of extra work each week, whether it’s overtime at work or watching neighbors’ dogs.

9. Buying retail

Paying retail markup is like setting a match to a pile of cash. Smart buyers find ways to avoid it.

According to, a new car’s value drops 8 percent the minute it leaves the dealer’s lot. At the end of the first year, it’s worth 19 percent less. After two years, it’s worth 31 percent less.

One caution: There are things you should never buy used — pet food, blenders, hats, mattresses, underwear, swimming suits, vacuum cleaners, stuffed animals, tires and software, among them.

Build a better habit: If you feel pressure to keep up with your friends or neighbors, ask yourself what that’s costing you. Stay out of malls and brand-name stores except when researching products. Read up on prices online so you know a good price when you see it.

Shop at wholesale clubs and bulk stores, garage sales, consignment stores, thrift stores, online auction sites and classified ads. You’ll find especially good deals on used cars, refurbished electronics, jewelry, furniture, housewares, clothes, tools, books and sports equipment.

10. Using shopping as entertainment

You know people with compulsive shopping habits. Maybe you are one. Spending creates a high that’s addictive and can severely damage your budget and the financial security of your family.

Build a better habit: Try a spending fast, remove your name from catalog lists, stay out of stores and hang out with friends whose idea of fun doesn’t include shopping.

But if none of these habit busters works and you’re still struggling with your shopping habit, you may need help. Debtors Anonymous is a free, nonprofit 12-step organization based on the principles of Alcoholics Anonymous.

Do you have tips for breaking bad money habits? Share them in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.

Stacy Johnson

It's not the usual blah, blah, blah

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  • Great points. It’s the little things that often eat away at personal financial progress. I think #8 is so important because any setback, minor or major, will force you to continue living in debt. Pay yourself first! It’s not just a slogan.

  • transmitterguy

    11. Don’t talk yourself into thinking you need something when you don’t. Don’t buy it. Go home, and ask yourself If you need It 10 times during the next 24 hours. Most of the time the infatuation will wear off and you have saved money.

  • ritzpru

    Carrying a Credit Card Balance is the worst thing you can do with your finance. The interest rates kill you

  • Jayne Rossetti

    For your lattes, buy a stovetop Bialetti espresso maker for $25 – $35. It won’t foam your milk, but you can warm it in your microwave.

  • Debbie Chen

    As with all financial/money issues, the key is to live below your means and limit debt.

    I would try to first cut back on insurance costs as they have always been one of the major issues in this country. For healthcare, you’re on your own, but for car insurance you can definitely find some budget rates. Aim for $25~ month (check Insurance Panda)​… for car insurance there’s really no need to get an expensive policy from places like GEICO, Allstate, etc… a minimum policy is enough for most situations. You can use the saved money to expand your bank account or pay off your debt.

    Also, you need to make sure you don’t have outrageous interest payments or anything like that…. that’s just throwing money away. So, you need to limit your student loans, mortgages, credit card, bills, whatever… If you MUST be in debt, you need to do it the smart way (and not the way that leads to huge interest payments every month).

  • cybrarian_ca

    Cable – sorry, can’t cut it. Have it down, but spouse is freelance sports writer who needs cable coverage of worldwide boxing, tennis, and other smaller-market live sports. Happily, it’s partly deductible as a business expense, and entirely when there are pay per view events he covers. And after having been in 4 hurricanes, 2 tornados, & 2 earthquakes, & been without power for weeks at a time, I will never be cutting the landline. Cell phones and computers don’t work when there’s no power for 3 weeks, but a landline does.

  • SuzieQ

    I have always done all of the above and am now only working part time because I can. I really could have retired at 50, but chose to work because I like what I do. Truth be told, however, coupons and deals are not what they used to be.

    • Sherrie Ludwig

      I do very few coupons because they are usually for packaged goods I wouldn’t use anyway, or name brands that even with a coupon are more $$ than store brands. I haven’t bought a new piece of clothing in years. I decluttered, and found clothes I forgot I had, so went “shopping” in my closet. When I wore out my jeans, I bought “new” at a designer clothing consignment shop near me. I got two pair of name brand jeans (oh, and I am size 16 and tall) and a new pair of Nine West black leather clogs. Total with tax: $38.98. I am hooked on consignment shopping, BUT I only go in when I actually have to pitch something out/rag bag it because of wear. Could maybe do even better at Goodwill, but I would be tempted by too much cheap stuff.
      One more thing: learn to cook a few cheap and easy things, like mac and cheese from scratch, rice pilaf (great way to stretch some leftover meat and veg), stir fry anything, and soup. Am writing this eating a bowl of homemade soup from a leftover ham bone, a bag of lentils, some onions, celery and carrots. Ten minutes’ total work, enough to eat some and freeze some for later.

  • Tom

    Our “landline” is a cell. The company gave us a small receiver/antenna (so better reception in our marginal reception area) and it hooks into our existing cordless house phones. Same phone number as far as callers are concerned (can be bad – telemarketers) so kept business and personal contacts. 911 all OK. Billed as a cell line and saved about $30 a month. Downside, can’t use line to fax and caller ID only gives caller number not name.

  • Disum Merlin

    I am one of the lucky ones who live near a city that has airbox. I dropped cable and can only get limited internet in my home so being able to get a premium channel like starz for a few months per year is my treat. I have a library that keeps a good selection of dvds up to date. That and local channels is my entertainment budget. I don’t go to movies anymore but shop for salmon and steak on sale to have my “restaurant meals” at home.

  • Georgia Wessling

    1. No cc balance in 10 years. 2. Funded my 457, but late in life. However, I only wd 1 time annually, the minimum amount. 3. Only contract I check is phone & internet. An employee said to check @ 6 months. Never check on my insurances. Had auto & home for 51 years w/same company and prices reasonable. My life & health insurance are very reasonable and I will not drop because I could never get it back if I did. It is the insurance from the state for retirees. 4. Dropped cable 4 1/2 years ago. Use only the computer (CBS All Access $5.99 mo.) and you tube to watch old movies, music, preaching, etc. I still have my landline and will not drop it. I am 79 and use my cell phone as little as possible. I am on my daughter’s AT&T cell and it costs me $12 a month. I rarely give out my cell number. 5. I rarely, if ever, coupon. I live alone and do not buy enough to make the hassle worthwhile. 6. Have never invested in my life. Put my 457 in their reg. savings and it was paying 8-9% when I retired. 7. Never hooked on lattes. I go to Casey’s for coffee and to visit. I use 1/2 French Vanilla or Chocolate and 1/2 coffee and the cost is all of 75 cents. 8. Since retirement, I have a satisfactory emergency fund. 9. I buy retail, dollar stores and have a membership at Sam’s. I seldom use Sam’s a lot as it is 80 miles from my home. I could go on the bus service mentioned below. They go once a month to Sam’s. 10. I never really enjoyed shopping. I do like to donate once in awhile to the local churches food bank. Since I do my walking in the grocery stores and Dollar General, I see when they get immense discounts (like 3 cans of veggies for $1) and buy some then. I live in a small town (@ 1,700) and my utilities and taxes are not too costly. Also, we have a transportation system for people in rural areas, those without vehicles and those who just want to go shop and it has very reasonable costs – $4-10 for roundtrips within a 80-90 mile radius. We also take longer trips and visit Branson, MO once a year at a very reasonable discount. Can’t think of one reason I should move. I love this area and the people in it.

  • John

    Why is it always don’t buy the latte. All the people in the coffee business must love that. How come money authors/reporters never mention – beer, wine, other alcoholic drinks, cigarettes, pedicures, hair stylist, shoes. How about a little balance in the article. Its your over indulgence in whatever that cost you money.

    • NYC1977

      Very true. I am 50 (close to 51) and I have never smoked and have only had alcohol twice a very long time ago. The amount of money I haven’t spent on these two things is my life, even at minimum usage, must be staggering.

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