Human beings are habit-creating machines, craving any mental or physical shortcut that lets us focus on higher-level thoughts, such as what\u2019s for lunch or developing theories about Netflix dramas.<\/p>\n\n\n\n
Bad money habits are more difficult to steer out of than other automated behaviors like driving a car. Why? Financial peace of mind is a much more subtle reward than the satisfaction of navigating a half-ton piece of metal through city streets without death or injury.<\/p>\n\n\n\n
Still, every person who is good at money learned good habits, which means you can, too. \u201cWhat we know from lab studies is that it\u2019s never too late to break a habit. Habits are malleable throughout your entire life,\u201d Charles Duhigg, author of \u201cThe Power of Habit,\u201d told NPR<\/a>.<\/p>\n\n\n\n Here are seven financial habits you should break before you go broke.<\/p>\n\n\n\n Who do you think you are, the U.S. government? America\u2019s fiscal deficit is projected to be $559 billion in fiscal year 2017, according to the Congressional Budget Office<\/a>.<\/p>\n\n\n\n How is your own personal deficit? About one in five Americans spend more than they earn and 38% break even, research from the National Financial Capability Study shows<\/a>. Your goal must be to join the 40% of Americans who spend less than they earn.<\/p>\n\n\n\n Here\u2019s how not to handle your obligations: When a collection agency calls, you pay the bill. This kind of financial firefighting only guarantees you\u2019ll veer from crisis to crisis as your credit score<\/a> burns.<\/p>\n\n\n\n Payment history carries huge weight on your financial future; more than one-third of your credit score<\/a> is judged by your ability to pay your power bill, car insurance and credit cards on time. If you can\u2019t, work out a payment plan with your creditor before<\/em> it goes to collections.<\/p>\n\n\n\n Credit cards are a weapon in your financial arsenal. Like all armaments, they can be used in strategic defense or to shoot yourself in the foot. Too often, it\u2019s the latter \u2014 the average U.S. household with credit card debt has $16,748 of it<\/a>.<\/p>\n\n\n\n That plastic in your pocketbook is the greatest enabler of bad money habits, allowing you to spend on a whim and forsake all budget plans. Sticking to a budget should be your most faithful money habit<\/a>.<\/p>\n\n\n\n Today, consumers must take control of their own financial lives, whether it\u2019s understanding health insurance or guiding their own 401(k) plans to invest for retirement. Even so, during the rollout of the Affordable Care Act, many consumers struggled to understand basic health insurance terms such as \u201cdeductible,\u201d a survey by the Kaiser Foundation found.<\/a><\/p>\n\n\n\n Learn the lexicon of finance to manage your money better.<\/p>\n\n\n\n \u201cI used to catch myself saying, \u2018Investing is hard. I just don\u2019t understand it.\u2019 This gave me permission to avoid learning how to invest,\u201d wrote Ann Marie Houghtailing<\/a>, author of \u201cHow I Created a Dollar Out of Thin Air.\u201d \u201cNow I say, \u2018Investing is a skill. You just have to start small.\u2019\u201d<\/p>\n\n\n\n Old habits die hard, and one of the oldest habits is using checks to pay bills or make savings deposits. \u201cPersonal finance habits take longer to change than the way you might switch from one smartphone to another. That\u2019s because money is so important to us,\u201d Fred Davis, a professor of Information Systems at the University of Arkansas, told Marketplace.<\/a><\/p>\n\n\n\n Set up automatic transfers for bill payments. Also automatically have 10% or more of your paycheck sent directly to your savings account. These two steps will go a long way toward building good money habits and credit scores with little effort.<\/p>\n\n\n\n Whatever energy you\u2019re spending complaining about the size of your paycheck takes energy away from finding ways to improve your bottom line. Think you\u2019re being underpaid? Negotiate a raise or at least talk with your boss to understand what\u2019s needed to see a bump in pay. If you\u2019re valued, your supervisor will see the implicit threat that you may leave for a higher-paying job. Start looking for that more lucrative gig while you\u2019re at it.<\/p>\n\n\n\n In the meantime, investigate ways to build other streams of income<\/a> and seek ways to improve your skills.<\/p>\n\n\n\n OK, money does bring happiness, but only to a point. Purchasing experiences and giving to charity have a much longer shelf life for our well-being<\/a>, research suggests.<\/p>\n\n\n\n Breaking your go-to financial routines will take time and effort. Subbing in habits that improve your bottom line \u2014 paying bills on time, using technology and increasing your income and savings \u2014 will be worth the work in the long run.<\/p>\n\n\n\n Kevin Voigt is a staff writer at NerdWallet, a personal finance website. Email: kevin@nerdwallet.com<\/a>. Twitter: @kevinvoigt<\/a>.<\/em><\/p>\n\n\n\n Updated March 17, 2017.<\/em><\/p>\n\n\n\n The article 7 Bad Financial Habits You Need to Break Right Now<\/a> originally appeared on NerdWallet<\/a>.<\/p>\n\n\n\n1. Stop spending more than you earn<\/h3>\n\n\n\n
2. Stop ignoring your bills<\/h3>\n\n\n\n
3. Stop using your credit cards like free money<\/h3>\n\n\n\n
4. Stop thinking you\u2019re not smart enough<\/h3>\n\n\n\n
5. Stop making it hard to save<\/h3>\n\n\n\n
6. Stop complaining about your paycheck<\/h3>\n\n\n\n
7. Stop thinking more cash brings happiness<\/h3>\n\n\n\n
Replace bad habits with good ones<\/h3>\n\n\n\n
More from NerdWallet<\/h4>\n\n\n\n