Bad money habits are easy to form. Some of the worst can be with your own money. If you don’t correct these, FAST, you could find yourself in a world of hurt…financially speaking.

Some of the problems you could face are mounting debt, bad credit, a life of missing out on your goals, no savings….and these are the least of your worries. But, don’t worry. Not only am I going to help you to identify your bad money habits, I’m going to tell you how you can easily turn them into GOOD money habits.

Missing Payments

The first bad money habit is missing a bill payment. This can be a utility bill, credit card bill, mortgage or rent payment or even paying back a friend. It’s easy to do, but completely avoidable.

There are several problems that can come from not correcting this habit.

First, you’re charged either interest, late fees or both.  You’re taking your hard earned money and giving it away.

Next, your credit can be harmed. This will make it more difficult and expensive to make large purchases, like a home. The worse off your credit is, the higher the interest rate on your mortgage, which equals a higher payment. You’re literally paying more money for a home than you have to.

There is a very simple way to turn this around. Automate payments. There are two ways to do this. First, go directly to the vendor. The vast majority of anyone receiving ongoing payments will have the ability to automatically deduct your payment from your account, each month on the due date.

The other option is with your bank. Many banks today have a bill payment system that can be set up through your online account. In my case, my bank actually tells me what bills are about to come out of my account and for how much. This also works in lieu of mailing a check. If a vendor only accepts paper checks (because they live under a rock), the bank will send out a paper check for you free of charge.

Bad Money Habits, credit cards

Only Paying Credit Card Minimums

This bad money habit is likely one of the worst.

By maintaining a balance on your credit card, you’re literally deciding that not only are you spending money you don’t have, but you’re willing to pay more for it…a lot more! Just like the last bad money habit, this one also is charging you interest.

If you paid $100 for something using a credit card, you’re really paying somewhere around $120 if you leave the balance on the credit card for a year before paying it off. Only paying your minimum can have a cyclical effect as well. Because you’re making monthly interest payments, you’re not saving. By not saving, you will likely have to use a credit card again if an emergency expense pops up. This will cause you to make more monthly credit card payments, and so on.

There are several things you can do to reverse this bad money habit.

First, stop using credit cards. You’ve already spent money you don’t have. Until you’ve paid it off entirely, you should lock them in a safe. You can also freeze them…literally.  Put the card in a glass of water and put it in the freezer. I have a funny story about this from college, but now’s not the time.

Second, set up a budget and pay off the debt. Start with the highest interest rate first and work your way down. Lastly, once the card is paid off, set it up on an automatic payment IN FULL. Each month, if you use the card, pay it off. Credit cards can have tremendous benefits for you financially. But, if you don’t pay it in full each month, the negatives will far out weight any positives.

Paying for Unused Subscriptions

Guilty. I have had a number of these myself. Usually, these aren’t the expensive ones. But, if it goes on for too long, you could find yourself a couple hundred bucks lighter…and for no reason.

Technology has made it easy to sign up for things. Free trials are designed for this very purposes. Your subscription kicks in and you don’t even realize it. Again, you’re throwing money down the toilet for no reason. This bad money habit can easily be reversed by tracking your expenses.

Using an online tracking tool will not only help you with setting and sticking to a budget, but it will also show you when unintended transactions come through. As soon as it pops up, cancel it. You may even be able to charm your way to a refund if you play your cards right.

Blaming Others

The victim mentality. It’s so dangerous.

For a lot of people, it’s “always someone else’s fault”. This isn’t just a bad money habit, it’s a toxic way to live your life. Now, I won’t say that everything is your fault, because it isn’t. But, how you prepare and protect yourself is entirely in your hands. Refrigerators crap out, tires blow out and storms can drop a tree branch on your pool screen.

How you remedy this bad habit is more than just with good habits. It’s with a change in your outlook. If someone knocks you down, it’s up to you to pick yourself back up.

How do you do that with money? Through preparation.

First, you need to transfer your risk. There are plenty of insurance companies willing to take on your risk for a small fee. A good money habit is to view insurance not as a bad thing, but as your protector.

Find a trusting, independent insurance agent and have them assess your situation and prescribe the right kind of insurance. They can shop it around for types and rates that fit your budget.

Second, you need an emergency fund. This is 3-6 months of your essential “needs“. This is your cushion to help you “get back up” after something unexpected happens. Figure out how much you should keep as your emergency fund and set up an automatic transfer, every pay period, until it’s full. You can also find other ways to raise funds to expedite the process. Here are some ways you might not even know about!

Buying Lunch Everyday

This is also an easy, bad money habit to establish. It’s fun! It’s easy! But it adds up quick!

Lunch these days costs about $10, if it’s cheap. If you eat out M-F every week, that’s $50 per week…$200 per month…$2400 per year!

Ok, I know you probably don’t eat out EVERY day for lunch. But, you probably don’t only pay $10 every time either. $2400 can fly two people…to HAWAII! Woohoo! Doesn’t that sound better than going to Jimmy John’s every day?

This bad money habit is so easy to establish, but with this sort of incentive, it should be easy to get rid of too. There are two easy good habits to reverse this one bad money habit. First, pack health snacks. Wait, snacks? Not a lunch? Well, a lunch is good too. But, if you pack snacks and munch on them throughout the day, you can either hold off on eating lunch until you get home, OR you won’t care as much about what you eat (because your’e not STARVING).

This can allow you to pack an easy, boring lunch. If you are forced to eat out, then maybe you’ll have a smaller appetite and spend less. Second, food prep! Sunday, make a huge batch of…whatever. Something that will last the whole week.

Here is an article to spark some ideas. Leftovers is another easy one. There is always some random collection of food in our fridge left over from the last few dinners. Don’t be too picky and eat before you’re STARVING! The hungrier you get, the more likely you are to want to get something from a restaurant.

Keeping Up With the Jones’s

I think this one is likely one of your bad money habits, whether you realize it or not.

This doesn’t necessarily mean that you buy something to be like someone else. This can also mean you buy something to impress others or for reasons not of your own.

For example, you worry about what others think of your car, so you buy an expensive one. Another example is expensive accessories like watches or purses. Now, don’t get me wrong, I am a big “watch guy”. I just don’t buy watches unless it fits my budget and can be paid in cash.

The potential list of issues caused from this behavior is a long one. Not only are you not saving for important things like your emergency fund or retirement, you’re probably in credit card debt and living way beyond your means.

You’ve filled your life with things that aren’t important to you, but are important to OTHER people. Sounds pretty dumb when you put it that way, right? The GOOD money habit to offset this BAD money habit is to re-evaluate your goals on a regular basis. Find out what’s really important to you and live within the standards YOU set for yourself.  Your standard of living should reflect your values and goals.

Secondly, build a budget and choose your extra spending money carefully.

If it’s not something that really brings enjoyment to you and your family, skip it. If something comes up that you just “gotta have”, wait two days. That’s the test. If the excitement fades after a day or two, skip it.

If you see a trend here, it’s that most of these habits can be reversed by paying closer attention to your money. Whether it’s through budgeting, being more intentional about how you spend your money or figuring out what your goals are, it all boils down to habits. It doesn’t take much to turn your bad money habit into a good one.

One small change can have an enormous impact on how you spend the rest of your life.

Brad Ruttenberg

Brad Ruttenberg


Sports Fan, Movie Buff, and Anything Outdoors sums it up.  Brad loves spending time with his wife, Ashley, and their two boys.  He helps empower people to take control of their money, bringing them the confidence to build the life of their dreams.

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They are identical twins and money experts.  Matt and Brad Ruttenberg have, combined, over 2 decades of experience as financial planners.  They are known for simplifying money and helping others go from living paycheck to paycheck to thriving financially.

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