In today’s economy, it’s easy to look for outside forces to blame for bankruptcy. Topics like inflation, unemployment, and home prices are frequently featured in the news and on social media platforms. However, you have more control over your financial destiny than you might think.
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Christina Micas, a self-described “shopaholic free-thinker” and YouTube financial influencer, believes bad money habits are holding you back. Micas admits that she was once a shopaholic when she was struggling with $120,000 in student loan debt. But by breaking her bad habits and re-establishing her relationship with money, she was able to get her finances back on track.
In a recent video, she detailed eight financial habits that got her into financial trouble and that you, too, should probably stop.
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I will buy more because it is cheap
Thrift and second-hand stores are a great way to save money instead of buying new clothes at the mall. The habit of shopping at thrift stores is becoming increasingly popular, with purchases increasing by 12% in the past decade.
But be careful: It’s easy to get carried away by low prices. You might start out with the intention of buying one or two items, but end up spending too much because the price is so low.
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As your income increases, so do your expenses
If you’ve earned that hard-earned raise, it’s probably time to celebrate. Between January 2020 and January 2024, the average American wage increased by more than 21%. But average personal savings fell by about 47% in that time, according to MarketWatch. This suggests that Americans are finding it harder to save, even as their incomes rise. One reason is lifestyle changes.
It’s easy to raise your standard of living when you have more money. A common problem with Americans is that they raise their standard of living every time they earn more. Upgrading your living arrangement, buying a new car, and eating out more because of your higher salary can mean running out of money before payday if you’re not careful. Maintaining your standard of living and saving, investing, and paying down debt are better uses of your extra income.
Micus says that’s not to say you can’t upgrade your lifestyle, he just suggests doing it “slowly and carefully.”
Spending money on your fantasy self
For Micus, one of the biggest challenges in getting her finances back on track was stopping spending on her fantasy self. Previously, she would buy things for the reality she wanted, not the person she actually lives. Buying luxury clothes, shoes, and accessories for the person she wanted to be left her with a lot of items she rarely wore because they weren’t practical for everyday life.
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There are a few exceptions to this rule. Micus points out that spending money on gym clothes and memberships to get in shape is just one reason to spend money to get into the person you want to be. As long as you’re working to get into the person you want to be in the future, buying things to look good isn’t a bad spending habit.
Make joy a priority
Instant gratification is the enemy of your bank account. It’s human nature to pursue pleasure, and for many of us, this leads to unnecessary purchases. Learning to say “no” to yourself and delay gratification can improve your financial situation.
Waiting to buy something not only helps you buy less, it also helps you determine how much you actually want that item — if you stop thinking about the purchase after a few days, it was a mistake to have bought it in the first place.
If you’re not a fan of impulse buying, Micus suggests making a wish list, which will help you remember the items you’re excited about and give you time to pause and decide if the purchase is worth it.
Spending to save
Everyone wants to save money, but sometimes we might be fooling ourselves: According to a survey conducted by CapitalOne Shopping, 91% of Americans look for discounts before making an online purchase.
Micus explained that it’s a common marketing tactic to discount items to trick you into thinking you’re getting a bargain. When you buy a pair of shoes at half price, you might feel like you’re saving money, but in reality, you’re just losing money that you don’t need to spend. Remembering this when you shop can help you refrain from buying something just because it’s on sale.
Agree to all
Dinner parties, trips, movies, drinks, and other events are great fun and allow you to connect with family and friends, but saying “yes” to every invitation that comes your way can be expensive.
Micus points out that saying “yes” to everything means saying “no” to your financial goals. Learning to find balance and turn down invitations you can’t afford or aren’t particularly interested in can help you save more.
Overusing credit cards
Credit cards are a popular spending tool. According to Mychas, 61% of Americans have credit card debt, averaging about $5,800. For some, it’s an income issue: they don’t make enough to buy what they need, so they have to turn to cards. But for others, it’s an issue of not keeping track of their credit card spending.
Previously, Micus would use his credit card without knowing how much he could spend, thinking he could pay off the remaining balance with his next paycheck, but he often ended up spending much more than he intended. To break out of this reckless cycle, Micus learned to create a budget, calculating exactly how much he could spend each month and sticking to a spending limit.
Forgetting to pay yourself
When we get our paycheck, it’s easy to fall into the trap of not paying ourselves first. Most people pay their monthly bills or rent right away, then treat themselves or pay for any other expenses they need for the month. Whatever money is left at the end of the month, often little or no, goes into savings or investments.
To boost your financial health, Micus suggested setting aside a certain amount from your paycheck immediately for savings and investments.
The modern banking system allows you to automate the process of paying yourself first, automatically depositing a portion of your paycheck into a savings account before it’s available to you, making it easier to save money and, as Micus says, “it’s as if you never had the money in the first place.”
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This article originally appeared on GOBankingRates.com: 8 Bad Money Habits That Will Drive You to Bankruptcy, According to “Reformed Shopaholic” Christina Micus
