You missed the due date again for your credit card bill and now the interest rate on the card went from a reasonable 11.99% up to a heart-stopping 24.99%.
You “forgot” how much money you had in your checking account and overdrew your account for the second time this month, racking up yet another $35 overdraft fee.
You really want to get your finances on order. You’re sure of it. Your desire to get your finances in order is real, so why do you exhibit all the behaviors of someone who wants to keep your finances a mess?
Well, in shrink lingo – you’re exhibiting self-sabotaging behavior. That means your behavior is not in alignment with your words or your self-stated goals. And that leaves you with results that are pretty much the opposite of what you intended them to be. Don’t you hate when that happens?
Here are 7 self-sabotaging behaviors that keep you from reaching your financial goals and can even end up costing you money.
- Not opening the mail. It’s not always bad news. Although we think we know, we sometimes have no idea what is in an envelope. I have been surprised many times by what’s inside a familiar looking envelope. If you don’t open your mail, you may be missing good news, maybe a check or refund or a class action suit award that’s coming your way. Most importantly, you may also be missing an opportunity to keep a bad situation from getting worse. Not opening the mail does not keep you from experiencing a negative outcome, it only delays that negative outcome until it’s potentially much worse.
- Not planning ahead. Not all expenses are monthly. Some expenses are quarterly or annual, like subscription renewals, medication refills (my cat’s insulin), car registrations or credit card annual fees. And some expenses crop up seasonally, like Christmas gifts or Halloween costumes. If you’re not thinking about what expenses are coming up, you will always end up having to use emergency savings funds or credit cards to cover those expenses. Take a few minutes a month to think about what’s coming up in next month or two and add those expenses to your monthly budget. Yes, it may mean having to cut out some other expenses to fit those in, but that’s the point – you’re setting financial goals and along with those goals, you’re setting priorities.
- Having only vague knowledge about the details of your bills or checking accounts. If you don’t know exactly when your bills are due or exactly how much your minimum payments are for those bills, then your lack of clarity is costing you money. This means your payments may show up late or not at all and then you’ll get hit with late fees, interest charges or worse, the item will appear as delinquent on your credit report. If you need to, make a master list of all your bills, with all the due dates and all the amounts you owe so you’re not late. Commit to looking at what you have in your checking and savings accounts on a regular basis. You need to know how much you have in there and how much you have left so you don’t overdraw your account and end up incurring fees.
- Not carrying any cash. These days we use our credit or debit cards for most things, but sometimes, only cash will do. If you need cash and don’t have any, you may be forced to use an ATM that doesn’t belong to your bank and you will be charged a fee. That’s if an ATM is even available. You may also be in an emergency situation that requires cash, but now you’re really stuck. Always carry some cash – even $20 – just in case. If you don’t have an extra $20, then carry $5. Anything, just not nothing.
- Giving your credit cards or PIN number to people you may not be able to trust. In general, never give your PIN number to anyone else and only give your credit cards to those you trust implicitly. Your cards are connected to your credit report and you want to guard that connection carefully.
- Letting someone open up an account in your name. You’re trying to improve your credit score. You’ve been working diligently on paying off old debts and paying your bills on time. Then, you look at your report and notice there’s a cable bill that you never signed up for. Then you remember that you let your sister use your name to open up her bill and she hasn’t paid the bill! That happens more frequently than you could imagine. So just say “no” to giving your name and possibly your good credit score away.
- Being too generous in order to look good. Paying for other people too often or always being the one to “buy the next round” may make you look both wealthier than you may be and extremely generous, but if you’re really not making ends meet, then this behavior will eventually catch up with you. Even if you can afford it, this money may be better spent building up a savings account, an emergency fund or putting a down payment on a house. If you find yourself offering too much of your money to others, ask yourself why and what you’re getting out of it.
What other self-sabotaging financial behaviors do you exhibit? How might your financial life look different if you addressed one of these?