4 Purchasing Habits That Can Lead to Money Problems
Unchecked purchasing habits can always lead to financial trouble sooner or later. Even if you have a substantial income, it’s still easy to fall prey to bad habits. You may find yourself visiting a moneylender more often because of this.
To avoid running into money problems, watch out for these four unhealthy purchasing habits.
Relying too much on Buy Now, Pay Later
Buy Now, Pay Later (BNPL) offers can actually do more harm than good. In essence, BNPL gives you false hope that you can get the things you want even if you cannot afford them yet.
Let’s say the payment deadlines catch up to you, and you are unprepared. You haven’t budgeted much for paying these bills. With that, your BNPL bills will drain your finances.
Instead of falling for attractive BNPL offers, always look at your budget and current financial situation first. Can you afford to buy this thing you want? If you can’t yet, it’s best to wait. Save enough money before making the purchase.
Unnecessary credit card purchases
Credit cards are convenient. You don’t have to carry lots of cash with you, and you can buy nearly anything with a credit card.
But of course, there’s always a catch. If you’re not careful, your credit card bill can spiral out of control. Soon enough, you’ll be facing credit card debt that can ruin your finances.
The best way to avoid this is to limit your credit card purchases. For example, don’t use your credit card for necessities like food, rent, and utilities. Also, make sure you have the money to actually fund your credit card purchases. Otherwise, hold off on buying anything.
Most importantly, track all of the purchases you make with your credit card. This way, you know exactly how much you’re spending on credit. When the monthly bill comes in, you won’t be surprised anymore.
Lifestyle inflation
Each time you get a salary raise, it’s tempting to buy more stuff or take on a more expensive lifestyle. This is called lifestyle inflation. While it feels good that you can afford more costly things and experiences, each lifestyle upgrade can be financially draining.
Here’s another thing. Lifestyle inflation often involves purchasing items that become liabilities. In other words, these things will make you lose money over time. Instead of using your higher salary to be more financially secure, you would end up accumulating debt.
Impulse buying
Was there ever a time when you bought something just because it was on sale? Or you bought it just because you wanted it right away when you saw it? These are examples of impulse buying. These purchases are made without much thought of whether you really need something or not.
Later on, you’d often realise you don’t need any of those things you bought on impulse. You could have used the money elsewhere, or you could have added them to your savings. Left unchecked, impulse buying may even lead to financial ruin later on.
To avoid this, stop and think first before making any purchase. Ask yourself, “Do I really need this?” a number of times before deciding to buy something. More often than not, you’ll realise you don’t need many of the things you want to buy.
Conclusion
Unwise purchasing habits can always lead to financial problems. Avoid these four bad buying habits and you can take more control of your finances. You will have more money for essential spending, saving, and investing as a result.