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10 Money Habits People Believe Are ‘Normal’ That Are Actually Toxic

When it comes to managing money, you either have a great relationship with money or a bad one. Sadly, more often than not, people are taught money habits that are seen as ‘normal’ but are actually quite toxic and can end up causing more problems in adulthood.

So, if you are tired of struggling with your finances, it’s time to take a closer look at your money habits.

10 Money Habits People Believe Are ‘Normal’ That Are Actually Toxic

Spending more than you earn

You’ve likely heard the term “keeping up with the Joneses” and that’s exactly a major money habit that is often seen as ‘normal’ and it is not.

Many people believe they need to keep up with their neighbors – the new house, the new car, the lavish vacations and end up spending more than they earn furthering their issues with money.

It’s important to remember that you can’t spend more than you make if you want to build wealth and achieve financial independence.

Relying on credit cards

Look, I’m avid user of credit cards but it took a long time for me to break the habit of just swiping my card now, and worrying about paying it later.

Using a rewards credit card can be a good idea if you pay it off in full each month (which is exactly what I do now). However, if you carry a balance and pay only the minimum payment, you’ll end up paying a lot of interest (unnecessary spending) and could even end up damaging your credit score.

So, if you can’t control your credit card spending, use cash or debit cards only.

Retail therapy

Okay, I’ll be the first to admit, retail therapy feels GOOD in the moment. Plus, it’s sort of fun to be like, “Ugh, I need some retail therapy”.

However, it is NOT a good money habit to have.

Shopping can be a fun way to spend time with friends or family members, but it can also become a toxic behavior if you’re using it to cope with difficult emotions or financial difficulties.

Perhaps set aside a certain amount you are allowed to spend each week and carry that amount in cash to avoid overspending.

I’ve also heard of someone who got a job as an Instacart driver so they could shop without spending their own money. They’d get some retail therapy in + make some money. Total win-win!

Not Having A Budget

Even though I’ve worked really hard to get where my family and I are financially, I still and always will, use a budget.

Some people live their life without a budget and often that also results in living paycheck to paycheck. Why? Because they have no idea where their money is going.

If I had one habit to tell you to pick up now, it would be to create a budget. Any budget. It’s really eye-opening.

Neglecting your emergency fund

Having an emergency fund is the first step towards financial security. If you don’t have enough money saved up for unexpected expenses like a car repair or medical bill, you’ll be forced to rely on credit cards or loans.

Far too often, people have told me they don’t need an emergency fund because they have a credit card with a large limit or they don’t want to keep that much money in the bank.

That is the wrong mentality to have and in my opinion, an emergency fund is a total must-have.

Not having a financial plan

Many people don’t have a clear financial plan or goals for their money. Without a plan, it’s easy to overspend or make poor money choices.

Without a plan, you are just working endlessly with no end in sight. Sit down, create a budget and a plan for your money and I believe the rest will fall into place.

Ignoring your credit score

I will say that one thing I wish we all knew more going into adulthood was credit scores and how important they are.

Sure, you can go on with life without ever needing a credit card but my guess is, you aren’t sitting on a load of cash enough to pay for an entire house, right?

Well, that’s where getting and keeping your credit score and entire credit portfolio, is a huge task that many often ignore until it’s too late.

I like to say this – work on your credit score like you depend on it and that way, whenever you do need to use your credit score, you are ready because in the credit game, slow and steady sort of wins the race.

Not tracking your spending

Do you know that most people just swipe their credit or debit card and don’t even think about what they are spending until it’s often too late?

Not tracking your spending (also goes hand in hand with a budget) can be so devastating to your finances and quality of life.

So, create a budget and then make sure to track your spending.

Relying on others for financial support

Depending on family members or friends for financial support can harm your relationships and your financial independence.

Honestly, borrowing from those you know, really creates tension in a relationship.

So unless you are in an emergency and need a quick way out, stick to figuring out your finances on your own and keep money and relationships with friends and family, separate.

Neglecting your retirement savings

It’s easy to put off saving for retirement when you’re young, but the longer you wait, the more difficult it will be to reach your financial goals.

If there is one thing I could change about my financial situation, it would be, to learn about investments and retirement options sooner in life.

So, learn it, save it and allow time to do the rest. You will thank me later.

Not communicating with your partner about money

According to MarketWatch, “Data released Wednesday by financial firm TD Ameritrade found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money.”

With that being said, it’s not normal to not talk to your partner about money.

Whether one person does the budget, one person makes the money or even one partner makes the most money, you need to have that conversation about money with your partner.

If you are living in the same household with another adult, you must have a conversation about the money going in, money going out and goals on how to handle and budget that money.

Now that you know 10 toxic money habits that are not normal, it’s important to recognize and address these money habits in your own life.

By seeking professional help, using automatic bill pay, and taking advantage of the widespread availability of free apps and financial products, you can take control of your financial situation and achieve financial independence. Remember, good habits take time to develop, but they are entirely worth it in the end.