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2018 is right here and for many people, that means a fresh start. Before you start setting goals and resolutions for the New Year however, it’s best to assess how the past year went and identify bad financial habits you may need to change, according to www.frugalrules.com. (5 banking habits you must avoid in 2018)

Meeting goals and making lifestyle changes that stick all come down to your habits. Ditching bad money habits and adopting better ones are key to reaching financial stability. Here are five financial habits you should consider getting rid of as you begin a new year.

  • Spending more than you earn

This is a bad money habit and it ensures that you’ll always be in debt. If you know that you consistently add to your credit card balances each month or frequently take out loans to make ends meet, you’ll need to figure out how much your deficit is each month (expenses minus income).

Then, commit to earning more, spending less, or both. When my husband and I got married, I knew he had some lingering credit card debt so I grabbed all his credit cards and we started only spending what we could afford.

It was an adjustment but eventually, we made it work and even paid off the credit card debt in just four months. You can do the same thing and pay off debt faster this year.

Digging your way out of bad financial habits can be really tough but you must get into the discipline of spending less than you earn if you want to make progress.

  • Creating an unrealistic budget

Do you hate budgeting? You’re probably not doing it right, which only makes you not want to budget. Your budget should basically be a spending plan for your money.

You have full control over it so you don’t need to make it more painful than it has to be and deprive yourself of the things you really like to do. Creating a realistic budget all comes down to your needs, preferences and current situation.

Here’s a simple guide on how to make a budget, but you need to make sure it fits your needs. You shouldn’t let what someone else is doing influence your own spending plan.

For example, I used to think that I had to be super frugal in order to get ahead. I tried modeling my budget after what I saw worked for other people and it made me miserable. Finally I wised up and created a plan that worked for me and allowed me to spend a little money on fun stuff like date nights, travel and clothes occasionally.

  • Making the minimum payment

If you want to pay off debt, you’ll need to break the bad financial habit of only paying the minimum payment each month. You’ll have debt for so much longer and pay a lot more in interest if you stick to that method.

I’m a firm believer that anyone can become debt free quicker if they really want it. You just need to get into the habit of making extra payments on your debt regularly, and knowing exactly how much debt you have.

You can automate the payments once you feel comfortable, but realise you don’t need a lot of money to get started. If you have credit card debt, you can help yourself by consolidating the debt to a lower rate so your payments will be more impactful towards the debt.

A few banks can help you slash your rates by half, or more, and help you kill the debt faster.

When I decided to pay my car loan off in three, I started out only making extra payments of just N60,000–N80,000 per month which was all I could afford at the time. Those extra payments still made a difference and paying more than the minimum became routine for me.

  • Complaining about your pay cheque

People do this all the time and while I try to be sympathetic, it’s a big pet peeve of mine. Complaining about your pay cheque is a huge waste of time and energy if you’re not planning on doing anything about it.

I had one friend who worked at a restaurant that was having some financial problems a few years ago. It got so bad that my friend didn’t receive a pay cheque for three to four weeks. My friend vented a lot with me about it and while it was a pretty ridiculous thing for the job to do, I was pretty sure it was borderline illegal and she could have better spent her time reporting the company and figuring out how to get her pay cheque sooner.

While that’s an extreme case, it’s important to realise that you may feel like you’re being underpaid or undervalued when you go over your pay cheque. Instead of complaining about it, take action and take your concerns straight to your employer or their employer.

See if you can negotiate a raise or review your tax forms to see what your exemptions are. Also, see if there are any ways you can make extra money to supplement your income.

  • Not paying yourself first

If you’re not already paying yourself first, you need to make that a top priority for the New Year. Paying yourself first is a concept that allows you to bump up your own personal savings whenever you get paid before you spend money on other expenses.

David Bach, author of The Automatic Millionaire, recommends working at least one hour per day for yourself to ensure you’re actually keeping enough of your earnings to help improve your own life vs. sending off payments to everyone else.

The best way to get into the habit of paying yourself first is to make it automatic. Set up a goal for how much you’d like to save each month then create a recurring transfer bank transfer from your salary account to your savings.

Pick a bank with no minimum balance requirement and that allows for automatic transfers. Some banks have no minimum balance requirement, and also allow for automatic transfers, making them a good option to consider.

Creating better money habits begins with ditching the bad money habits that have been holding you back from reaching success. When you’re thinking about the list of what you won’t be bringing into the New Year, I hope some of these bad habits make the cut so you can start out fresh.

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