Well, we did it. We made it through a pretty tough winter. While March is just getting started, we can’t help but feel so excited for the spring season to arrive. 

We like to think of spring as the season of renewal and rejuvenation. After all those long and cold winter days, the arrival of this new season signals the start of new beginnings. The snow melts away, the sun shines brighter, and flowers start to bloom. It’s a time of transformation and growth, not just for nature, but for us as well.

When it comes to transforming areas of our lives that our future selves will thank us for, one that is top of mind for many of us is our retirement plans. Are your current financial habits supporting your long-term goals for retirement, or will they end up sabotaging your family’s future? This may sound a bit dramatic, but unfortunately, we see the latter happen more times than we’d hope for. 

Financial habits are the patterns and behaviors that individuals exhibit when it comes to managing their money. Good financial habits can help us achieve our financial goals and live a more stable life before we officially enter our retirement era, while poor financial habits can lead to financial struggles and stress in the present and the future. The decisions we make today are what set us up for better tomorrows. 

More often than not, we are expressing these bad financial habits without even realizing it. Mindless actions can lead to the most damage, which is why it’s so important to establish control over our finances and not be irresponsible through these habits. This season, we’re asking everyone to take an honest look at their financial habits and identify those that we could consider as less than ideal to take into spring and the rest of the year. It’s never too late to reverse a habit that doesn’t align with your financial goals and retirement plans. Here are the most common ones we see: 

Impulse buying:

Impulse buying is when you make a purchase without really thinking it through. There are many areas that influence this type of purchasing behavior – we’re sure you’ve all heard of retail therapy. Situational factors such as sales, emotional states like feeling excited or bored, captivating marketing and packaging, and societal pressures to keep up with others’ spending habits or to maintain a certain lifestyle can all lead to us mindlessly swiping our credit cards.  

While we cannot deny that impulse buying can be a source of instant gratification, this feeling tends to go away rather quickly. Why? Because impulse buying more often than not leads to the feeling of regret. Other financial consequences such as overspending and high-interest debt also tend to follow these sorts of transactions. 

Avoiding impulse buying can be difficult, but here are some steps to try and control and break the habit: 

1. Plan purchases in advance: When you enter a store, walk in knowing exactly what you need to buy and how much you plan to spend. If prices are higher than what you expected, remind yourself that it is okay to leave the store empty-handed. You can always come back after reevaluating your budget
2.  Set a budget: We cannot stress this point enough! Setting a budget helps you organize every aspect of your financial situation, showing you what you can and cannot spend across different categories.

3. Avoid tempting shopping environments: If you’re the type of shopper that cannot turn down a sale, we have a solution for you – do not go to the mall. You can still budget for specific purchases that are known to be heavily discounted during sale seasons, such as TVs during Black Friday weekend, but what we’re trying to avoid is getting caught up with in-store marketing and sale prices that often lead to us overspending and not getting much of a deal in the end. 

Using credit cards for everything:

While using credit cards can be convenient and provide a range of benefits such as cashback, rewards points, and fraud protection, there are also many risks with swiping your card if you have bad spending habits. It’s easy to lose track of how much you’ve spent when using a credit card because you do not actually see the total dollars spent until receiving a monthly statement from your credit card provider. This can lead to feelings of shock, worry, and anxiety around how to pay off a bill that you may not have the available cash to do so in a given month. We unfortunately often hear about stories around people getting caught up with the dangers of irresponsible credit card use, such as high-interest rates and interest charges while carrying a large balance, fees for late payments and cash advances fees, identity theft and fraud, and damaged credit scores because of late payments, high balances, and maxed-out credit cards

If you find yourself in a position of having credit card debt, let’s make it a spring season goal to pay off the balance as much as possible. You can use these steps to help you: 

1. Stop using your credit cards: If you cannot control how much you spend using a credit card, simply stop using it. Cut up your cards, freeze them, or put them away in a drawer, so you can’t use them easily.
2. Pay more than the minimum payment: Paying just the minimum payment can keep you in debt for a long time. Try to pay more than the minimum payment to pay down your debt faster.
3. Prioritize high-interest debt: If you have multiple credit cards, prioritize paying off the one with the highest interest rate first
4. Consider a balance transfer: A balance transfer allows you to move your debt to a credit card with a lower interest rate. This can help you save money on interest charges, but be aware of any balance transfer fees
5. Explore debt consolidation: If you have multiple debts, you may want to consider consolidating them into one loan with a lower interest rate. This can make it easier to manage your debt and pay it off more quickly.

Remember, getting out of credit card debt takes time and effort, but it’s worth it to achieve financial freedom and get back on track with your retirement savings goals. Stay focused on your goal and don’t give up.

Not saving for the future:

A habit that we want to stress the importance of reversing is not saving enough or effectively for yours and your family’s future. Saving for the future can include retirement savings, your family’s emergency fund, education tuition, housing down payments and fees, and health care. We see this habit take a toll on our mental and physical health as well. All around, not saving responsibly for our lifestyles has a tremendous impact on what our future looks like. 

In order to save more money you need to spend less. This can take a lot of discipline for individuals who are impulse buyers, but it’s important to think ahead and realize how these bad spending habits could impact your future. We believe having a solid savings plan and looking ahead to what your life could look like financially in 5 to 10 years, should be exciting. Ultimately, we want you to be motivated by saving money so that all of your hard work throughout your adult life feels like a reward once you’re ready for retirement. We know you can do it, and we’ll be here to help you along the way. 

In conclusion, bad spending habits can have a significant impact on our financial health. By breaking these habits, we can take control of our finances and work toward a more secure future. It’s important to be mindful of our spending and to make smart choices that will benefit us in the long run. Let’s take this time of transformation during the spring season to see how we can better our lives and financial positions now and for our futures. Talk to us about how we can help you get on the right path this season and beyond.