The things you do today can influence your future. Good money decisions made now lead to a brighter, more financially secure tomorrow. Likewise, there are bad financial habits that can sink your future and lead to debt and devastation.

the skill of personal finance to deal with cost of living
Spending money without tracking will make your empty pocket

Every money decision you make everyday will influence the outcome of whether you'll be successful paying off debt or building wealth. As you lay your financial foundation, here are 10 bad financial habits to avoid:

1. Spending money without tracking.

One of the biggest pitfalls likely to trip you up is spending without tracking. When we just try to keep track of it in our heads, we aren't accurate. You are much better off actively tracking your spending, or at least using a personal finance app that will do the tracking for you. If you don't know where your money is going, you're more likely to spend more than you earn, and that way leads to debt.

2. Keeping up with the Joneses.

It's easy to fall into the trap of trying to buy thing things that other people have. Unfortunately, buying what you think you "should" buy forestalls thinking about your priorities. You could easily spend your way into debt and a poor financial future just by trying to "fit in" with your neighbors. Instead of keeping up with the Joneses, figure out what matters to you most, and stop spending on what's unimportant to you.

Just because you can afford it doesn't mean you need it — spend far less than you earn.

3. Spending everything you earn.

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Make money doesn't mean spending money

Even if you aren't exceeding your income, you still might be putting your financial future at risk. You should spend far less than you earn so that you can make saving a priority. Follow the old advice to "pay yourself first" and set money aside for the future and for a rainy day.

4. Habitually making late payments.

Your late bill payments can cause serious problems for your financial future. First of all, you run into late charges that can cost you money right now. However, repeatedly late payments can also result in a lower credit score. When you have a lower credit score, you will pay more in interest on your other loans, and you might even be unable to qualify for home loans or other loans that you might be interested in.

6. Withdrawing money from your retirement account.

Don't get into the habit of withdrawing money from your retirement account to pay costs. First of all, it can cost you a 10 percent tax penalty if you withdraw early from some types of accounts. Next, you are putting your future at risk since you no longer have the money in there earning interest. If you keep taking money out of your account, it won't build over time and you'll be without a comfortable nest egg.

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Make your payments automatic so you aren't surprised by late fees.

7. Putting others first.

We're told that we shouldn't be selfish, but sometimes you really do need to put yourself first. If you put your child's college fund ahead of your retirement, or if you are willing to cosign on someone else's loan, you could find your finances in jeopardy. As a cosigner, you could be on the hook for someone else's bad habits, and you can't rely on others to take care of you later. Make sure that your finances are secure before you expend your resources on someone else. Plus, if you are financial secure, you'll be able to better help others in the long run.


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