Drop These 5 Bad Money Habits and Grow Your Savings

Photo (cc) by 401(K) 2013

Bad money habits, like all types of habits, can be hard to break, especially if you don’t know you’re committing them.

Many Americans are practicing a handful of not-so-obvious poor money habits that could be undermining their financial health, according to CNN Money.

“The easiest way to becoming a millionaire for most people besides discipline is automation, priorities and goal setting,” Cary Carbonaro, a certified financial planner and managing director at United Capital, told CNN Money.

Carbonaro and other money experts told CNN Money that avoiding these five bad money habits could substantially boost consumers’ savings:

  • Failing to prioritize savings within a budget. Do you have a savings plan in place? If not, and the only money you plug into your savings account is whatever you have left at the end of the month, it’s time to set a savings target rate and prioritize your budget accordingly. “When you get your paycheck, have a certain amount that goes into a savings or investing account … you never see it,” Ted Peters, CEO of Bluestone Financial Institutions Fund, told CNN Money. To start, Peters recommends setting a 7-10 percent savings target. But don’t just set the savings rate for perpetuity. The rate should increase periodically. For example, if you get a bump in pay, your savings rate should increase to reflect that.
  • Paying too much for housing. You should not be paying more than 28 percent of your gross income on housing, Carbonaro said. That percentage represents principal, interest, taxes and insurance. Allowing housing to drain too much of your budget often doesn’t leave you with enough income to sock away in savings.

  • Investing too conservatively. Although getting more conservative with investments as you get older is typically a smart financial move, not taking enough risks as a younger person is to miss out on opportunities. “If you are 40 or younger, you should be 100 percent in equities,” Peters told CNN Money. If you’re older, check out “11 Pointers to Investing in Your 60s and Beyond.”
  • Routinely shelling out too much for bank fees. Banking account fees shouldn’t make a big dent in your budget. But if you’re routinely getting hit with out-of-network ATM fees, overdrafts or penalties for falling below your minimum account balance, then you probably need to sit down and re-evaluate the terms of your accounts to see if you need to make some account changes or routine changes, or both. Check out “Bank Fees Are Rising – Here’s How to Escape Them.
  • Impulse shopping. America is truly a nation of impulse shoppers. But making hasty shopping decisions can affect your bottom line. “If you want to make a big purchase, wait a day, sleep on it and see if you really need it the next day,” said Carbonaro, “99 percent of the time you don’t.” Find more tips on avoiding impulse buys in “7 Ways to Stop the Shopping Habit.”

What are your bad money habits? Any tips on how to break bad habits so you can sock away more money? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Medicare Mistakes to Avoid for a Healthy Retirement
5 Medicare Mistakes to Avoid for a Healthy Retirement

Medicare can be confusing. Beware these missteps — which can hike your costs.

30 Purchases That Will Start Saving You Money Immediately
30 Purchases That Will Start Saving You Money Immediately

Sometimes, you’ve got to spend to save. These canny deals are a good bet for savings.

How to Avoid Being Surprised by 7 Nasty Expenses
How to Avoid Being Surprised by 7 Nasty Expenses

Major expenses are difficult to predict, but there are ways to make sure you’re protected.

Retirees Can Dodge Taxes on These 9 Types of Income
Retirees Can Dodge Taxes on These 9 Types of Income

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons Hiding Cash at Home Is a Terrible Idea
6 Reasons Hiding Cash at Home Is a Terrible Idea

Stashing cash around the house is anything but harmless.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

Do This in the Car If You Want to Avoid COVID-19
Do This in the Car If You Want to Avoid COVID-19

It takes just seconds to take this simple preventive measure.

Netflix Hikes Prices: Here Are 10 Cheaper Streaming Options
Netflix Hikes Prices: Here Are 10 Cheaper Streaming Options

Prepare to dig a little deeper into your wallet for Netflix — or switch to a cheaper alternative.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.