Spending habits that can ruin your personal finance

In our lives, no one can completely ignore spending. The motivation behind earning is spending. However, your spending habits is also one of the factors influencing your personal financial situation. Though spending is not bad, here are some spending habits that you need to change to protect and maintain your personal finances.

Buying things on sale
From a personal finance perspective, buying things that are on sale is a good practice as you can save money and further improve your cashflow surplus. However, buying things just because they are on sale even though you don’t need it is not a good idea. This type of spending habit may work exactly the opposite by reducing your cashflows even further. So, buy things on sale only if you need them and not because you are getting a good deal. These days you may see the online sales that are going on throughout the year. So, say for instance, you come across a new mobile phone for which you are getting a better deal. Now here you need to stop for a second and ask yourself whether you really need a new phone? If the answer is yes then surely you may go ahead with it. Thinking for a second before buying would help you to avoid any unnecessary purchases which you may regret afterwards.

Use of credit card on every buy
Though the use of credit card is not bad, the way you use it may be bad. Credit card is something which you should use as a convenience in times of emergency and not just because it is available with you or you are getting cashback by using it. You should try using a credit card only when you want to buy things that you need and are falling short of cash. Also, you should use it diligently by squaring off the balance before month end. Try not to carry forward the balance.

Spending money just because you can
Spending surplus money just because it is available to you makes no sense as you are incurring an opportunity cost of building wealth. However, you can surely splurge, but you need to first make provisions for things that you really intend to spend money on like your financial goals and building wealth and then if you still have surplus left then you can think of splurging.