We pick up poor habits over time. If we hold onto those behaviors long enough, they start to feel normal. It becomes ordinary to overdrink, overeat, overspend.
Gradually, many of us have accepted harmful financial routines as part of daily life. These money habits sneak up on us. Before we notice, they’re woven into our routines.
And they’re expensive. Month after month, these financial missteps drain our wallets.
Below are six money habits that many have come to accept — and practical alternatives to replace them.
1. Carrying Credit Card Balances
Americans carry about $1 trillion in credit card balances. Credit card debt is one of the priciest kinds of borrowing, as card issuers profit from steep interest charges.
You may make monthly payments yet see little progress. Those towering interest rates — sometimes exceeding 20% — make meaningful payoff feel out of reach.
There are services that can help you significantly lower your credit rates quickly.
One option matches you with loan offers that can reduce your interest by a large margin — in some cases up to around 70% compared with typical card APRs.
The idea is simple: secure a lower-rate personal loan and use it to clear your high-interest credit cards. Then you’re left with one more affordable monthly payment that accelerates your path out of debt.
With a credit score around 620 or higher, you may qualify for loans up to six figures without putting up collateral, and terms can extend for many years.
Worried about qualifying? It takes only a couple minutes to check online and see whether you could cut the interest you’re paying.
*Offers depend on creditworthiness. Average credit card interest rates can be much higher than promotional loan rates cited.
2. Spending Beyond Our Means
It’s surprisingly simple to overspend these days. With purchases at our fingertips, resisting impulse buys takes real self-control.
One effective approach: stop paying more than you need to.
Imagine getting notified while shopping online that a better price exists elsewhere. That’s exactly what some free browser tools do.
Install the extension and before you complete checkout, it will scan other retailers — such as large national chains and popular marketplaces — to discover lower prices. It can also apply coupon codes automatically, alert you to price drops and display an item’s pricing history.
Say you think you found the best price on a TV. The tool will pop up if the same model is available cheaper somewhere else, and it will try any valid coupons for you.
Over the past year, shoppers have saved millions of dollars using such services.
It takes only a few clicks to add the extension and start seeing whether you’re paying too much online.
3. “Investing Is Too Intimidating.”
Investing often gets labeled as scary and intimidating.
It doesn’t need to be. You can begin with very little money, and there are platforms that even give you free stock when you sign up.
Whether you have $5, $100 or $800, there are apps designed for beginners that let you start investing right away.
Some popular brokerage apps attract both newcomers and experienced traders because they don’t charge commission fees and let you trade without per-trade costs. They’re also built to be user-friendly.
One nice perk: after you download the app and fund your account, you might receive a free share. The share is randomly selected, so its value varies, but it’s a helpful nudge to begin building a portfolio.
4. Flying Blind With Your Budget
If budgeting sounds awful, consider a simple method for people who dislike budgets.
The 50/30/20 plan is an easy way to bring your spending under control. No giant spreadsheets or drastic life changes required.
Here’s the idea: take your monthly after-tax income and allocate 50% to essentials, 30% to discretionary spending, and 20% to savings and debt repayment.
Put plainly: 50% covers necessities like rent or mortgage, utilities, groceries, prescriptions and minimum debt payments. Thirty percent is for fun — dining out, streaming subscriptions, hobbies and small indulgences.
The remaining 20% goes toward financial priorities: extra debt payments beyond the minimum, retirement contributions and investments.
5. Sticking With the Same Car Insurance
Chances are your current auto insurer is charging more than necessary. But you don’t need to spend hours contacting many companies to find a better rate.
Use an insurance marketplace to compare multiple offers at once.
Large comparison sites aggregate quotes from numerous carriers so you can see competitive options from dozens of insurers in one place.
Spend a few minutes answering questions about your vehicle and driving history and the site will surface recommended policies. In only a short time, you could lower your annual bill by several hundred dollars.
6. Assuming You Can’t Own Part of a Company
Look at lists of the ultra-wealthy and you’ll notice many of them own stakes in companies.
If you don’t have millions to buy whole companies, owning shares can still be within reach.
Micro-investing apps let you buy fractional shares of well-known firms for very small amounts — sometimes as little as a dollar.
That means you can invest in slices of big companies like major tech firms. If those businesses perform well, so can your investment. Some companies also pay dividends — a portion of profits distributed to shareholders — though not all stocks do.
Signing up is quick and the platforms use standard protections for investors’ accounts.
Often there are promotional bonuses for new users who deposit a small amount during account setup.
Not all stocks pay dividends, and dividend payments aren’t guaranteed each year.
Protections for brokerage accounts don’t insure against losses from market fluctuations.
For higher-priced securities, fractional share purchases may begin at small increments.
*Promotions are subject to terms and eligibility requirements; typically you must open a qualifying account and make a deposit to receive the bonus.
Paid non-client endorsement. Read app store reviews and important disclosures on provider websites.
Investment advisory services may be offered by registered advisers. This content is for informational and educational purposes only and is not investment, legal, accounting, or tax advice. Investing involves risk.
