1. You justify your purchases
Don’t try to rationalize those unnecessary purchases. On some level, we are all guilty of this. Between “I deserve this” and “I need this,” we’re constantly making excuses for spending money. This doesn’t mean you can’t treat yourself, but do it affordably and make sure you budget for it.
2. You refuse to address your debt
The first stage of grief is denial and dealing with debt can look very similar. Do not ignore your debt. As difficult as it is, you need to face your debt head on. Understand what you owe and create a plan of attack so you don’t have to experience the four remaining stages.
3. You are an impulse spender
With next day shipping and one-click shopping this has never been a more prevalent issue for consumers. These purchases are beyond even trying to justify, even if that Ewok dog costume is on sale and its adorable. That impulse is what is hurting your wallet. Try holding off on some purchases unless you’ve given them some thought. By all means that Ewok costume may be a need for you, but sometimes spending some time thinking about a purchase will help you remember that you don’t even own a dog.
4. You assume you are going to make more later
A great example of this is taking on student loans. Most students don’t have a choice if they want to go to college, and are now graduating with debt upward of $40,000 in hopes that they can land a job that will pay them enough to pay it back. In other cases, people are making purchases because they think they will be up for a promotion or have a raise around the corner. Even if all of these things do come to fruition you will still be paying more in interest than you would if you’d just wait.
5. You often dip into savings for expenses
J.P. Morgan has a famous quote where he said, “if you have to ask how much it is, you can’t afford it.” When you look at a price tag and immediately start thinking about how to move money around, take a step back. Once that money goes into your savings, it should disappear from your thoughts. The only time you should ever spend money from savings is when something happens that makes it necessary to use your emergency fund.