10 bad money habits that are slowing your savings

Knowing how to budget and save money is the best way to build your wealth. However, a lot of people have bad habits, especially when it comes to spending money.

The first way to overcome these habits is to recognise them. So here are 10 bad money habits you might have, and steps on how to fix them!

• Not having a budget. If you don’t know your expenses, you won’t be able to work out how much you should be saving each month. And you’ll most likely end up spending more than you can afford. Instead, figure out a budget and stick to it! Check out our budget calculator if you need help.

• Paying yourself last. It’s common for people to set all their money aside to tackle bills as soon as they get paid. Instead, try putting a minimum of 10% into your savings. Then pay your bills and work out how much you have left to spend until your next paycheck. If you get in the habit of doing this, you won’t even think of the leftover as spending money because it will automatically be classed as ‘savings’. This is an easy way to grow your savings!

• Being too comfortable with overspending and debt. If you have a credit card, it’s easy to get behind on payments and get yourself into debt. But this can end up costing you more in the long run. To avoid this, don’t buy things you can’t afford to pay off within the interest free period. And set up an automatic payment on your credit card to ensure you pay it off on time.

• Not having a safety net of savings to fall back on. There are things in life that we can’t plan for, so in case you have an unexpected medical bill, crash your car or lose your job, it’s important that you have a safety net. If you start putting aside a small portion of money every week or month, your emergency fund will build up and you’ll be more prepared for unexpected life events and you won’t have to dig into your savings.

• Shopping for things you don’t need. While it’s great to treat yourself every so often, you shouldn’t be spending large portions of your income on things you don’t need. I am definitely guilty of purchasing new clothes just for the sake of it but there are ways you can combat this expensive habit. Try delaying unessential purchases by 24 hours to give yourself time to think about whether you really need that new dress or pair of shoes - you might change your mind!

• Paying too much in taxes. A lot of people just pay their tax each year without doing research into how they can legally reduce the amount they pay. It’s definitely worth looking into any tax deductions that you could be claiming.

• Just letting your savings sit in your bank account. If you have saved a decent amount, just letting it sit in your bank account means that you could be missing out on extra cash. It’s definitely worth looking into investing your savings or putting it into a term deposit or a high interest savings account to make some extra cash.

• Not taking your own lunch to work. The cost of buying lunch multiple times a week really adds up. Instead, try preparing a yummy lunch to bring with you and you may be amazed by how much you save.

• Not shopping around for a good deal. A lot of the time, there are savings to be made when you spend time researching before making a purchase. While this may take more time, it’s definitely worthwhile if you’re wanting to save. For online shopping tips including information on upcoming sales and more tips on how to save, check out our Online Shopping Hub.

• Focusing purely on saving. There’s only so much you can cut back on your spending to increase your savings. Instead, it’s important to also be thinking about how you could be making more money and therefore, saving more. This could include starting a side hustle, asking for a pay rise or finding a higher paying job. For tips on asking for a pay rise, check out our guide.

One of the best things you can do to better manage your money is use a high interest savings account. Our experts have made the task easier by highlighting some of the best available high interest savers on the market. Start comparing them below!