8 Millennial Bad Money Habits You Need to Break

Everyone has bad habits. Staying up too late. Biting your nails. Stress eating.

And most of the time they can seem harmless.

Other times, these little habits have a way of majorly impacting our lives – like bad money habits.

Think about your finances like your health. If you don’t look after them day to day, there’s likely to be big negative impacts down the line. And if you don’t start making healthy changes today, your future could be looking bleak.

Little habits, day in and day out, add up to big results.

This might seem scary now but it’s actually a good thing! Because if you replace the following bad habits with good ones, you’ll see positive financial outcomes down the line.

1. You’re an Impulse Buyer

We’ve all been there. You run to the drugstore for toilet roll and before you know it you’ve added a lipstick, some bubble bath, and that cool new skincare serum to your basket. A trip that should’ve cost a couple of dollars ends up costing closer to thirty!

Americans impulsively spend an average of $183 dollars a month. At only $6 a day, that doesn’t seem too much but times that by 365 and you’ll be spending $2,196 extra a year! Another study suggests that the number is actually closer to $5,400 a year. That’s some serious money!

It’s time to get strict with yourself and think before you buy. Is this item a necessity?

Toilet roll – yes. Yet another lipstick – no.

A great way to get a grip on this is to start a spending log. You’ll quickly see how much those impulse purchases are adding up! Most people are surprised to find: a) just how many of their purchases are impulsive ones and, b) the amount of money these purchases are costing them.\

2. You’re Using a Credit Card When You Don’t Have the Money

Unless you’re able to pay off the full balance each and every month, using a credit card is one of the worst things you could do for your finances.

Using a credit card is an easy way to slip into spending beyond your means. And once you start, it can be hard to stop!

If you don’t pay off the debt in full each month, you’ll see the interest piling up, meaning you’ll be paying much more than you would’ve done had you just bought the item up front in the first place.

If you’ve already found yourself in this predicament, make reducing your outgoings and paying off your credit card debt your number one priority. And once you’ve managed to do so, stay away from that card until you have the money to cover it!

3. You’re Not Paying Your Bills on Time

Paying your bills late is an easy but dangerous habit to slip into. There are a number of reasons why paying your bills on time is super important:

You’ll cost yourself more money by incurring late fees and interest charges
Paying your bills late has a negative affect on your credit score
Once you’re behind with payments, it can be difficult to catch up and you can find yourself in a worse financial situation

If you’re the kind of person who’s prone to procrastination, especially when it comes to money matters, consider setting up a direct debit for your bills.

4. You’re Not Keeping Track of Subscriptions

Subscriptions are a massive money maker for brands. This business model means that they’re able to create a consistent income month-to-month and guess what – they rely on people forgetting to cancel!

Which, let’s be honest, most of us do. You sign up for that free 30 day trial and before you know it, you’ve been paying into the company’s pocket for a year.

That’s why every time you try to cancel a subscription, they’ll hit you with a new deal (Audible is a great example of a brand that does this!). You’ll likely to agree to a few more months of this great new deal and will probably forget to cancel all over again!

And remember subscription services aren’t just things like Netflix or Amazon Prime. They include companies like Fabletics, Les Mills Online, Hello Fresh, Savage X Fenty, and Birchbox.

Be wary of free 30 day trials (which you’ll likely forget to cancel) and make a habit of checking through each of your subscription services. Do you really need them all? Is the service they provide worth what you’re paying?

If not, it’s time to get rid of them!

5. You’re Using Shopping as Therapy

If you turn to ASOS every time you have a bad day, chances are you’re using shopping as retail therapy. When it comes to saving, this is a seriously bad habit (but one that we’re all prone to falling into from time to time!).

That instant stress release you get from spending money on something nice unfortunately doesn’t last long and won’t solve any of the deeper issues you might be facing. Retail therapy can become a be a bit like slapping a band-aid on something instead of treating the infection!

Depending on how often you succumb to retail therapy, it can also be a seriously expensive habit.

Consider implementing more mindful ways of dealing with your emotions, or at the very least setting a limit on how often and how much you spend.

6. You Don’t Have a Budget

Creating a budget can seem like a very daunting task, especially when you feel like you’re not in your ideal place financially.

I promise that, once you get started, it’s not actually scary at all. In fact, it’s pretty empowering! It allows you to take control of your finances, rather than feeling like they’re controlling you.

Having a monthly budget means that you know exactly how much you should be spending and on what. The alternative that many people find themselves in is simply walking around without a clue and hoping that things work out for the best!

7. You’re Not Investing Your Money

Historically, stocks and shares provide a better payback than savings accounts. Investing your money can be a great way to make it grow (although there are obviously always risks that go with this).

If you’re new to investing, check out this comprehensive guide for beginners, which breaks down everything you need to know into easy, manageable chunks: ‘Investing for Beginners: How to Get Started’.

8. You Collect Something

With the constant bombardment of adverts and influencers, it’s easy to be drawn into specific hobbies and spheres these days.

Maybe you love beauty and have a whole drawer of eyeshadow. Maybe you’re a bookworm and have shelves and shelves of novels waiting to be read.

Financially speaking, it’s a good idea to assess this collector’s mentality. Often times, we don’t need more than one item but purchase them because we like the idea of having a collection.

Before adding something to your collection, ask yourself:

Will I actually use it?
Do I need it or do I already own something similar?
Could I purchase it in a cheaper way e.g. secondhand or on ebook?

Final Thoughts

The hardest part of changing bad habits, especially when it comes to money, is acknowledging they exist.

Don’t feel bad if you do one (or all!) of the things on this list. Everybody has some bad habits and finances are something that must of us were never taught!

Hopefully, this post will have given you a great place to start to become a financial whizz and start living abundantly!

And don’t forget, when we’re used to living a certain way, it can be easy for bad habits to creep back on us again! So make sure to check in with yourself every now and again to make sure things are still going smoothly!