When it comes to managing your money, what works for one person does not necessarily work for another. I spend a lot of time with my clients determining the solution that best fits their needs and personalities. There are a few habits, however, I try to put a halt to as quickly as possible.
Issue 1: Multiple accounts with no defined purpose
It’s one thing to have one checking account for paying bills and another for your “fluff spending money” for the month. However, if you have multiple checking or savings accounts and you cannot clearly define which each one is being used for, you have too many. Money should be simple and straightforward. Banks these days are beginning to charge fees for having an account. One way to get around that is by having an automatic transfer into each savings account each month. I see individuals with 3 checking and 3 savings accounts, each with a $25 transfer each month (to avoid the fees), and no explanation as to why.
Solution: Close the extra accounts.
If you miss them after a few months, you can always reopen them and the bank will welcome you with open arms! 🙂
Issue 2: One spouse handles the finances, the other is completely oblivious
It’s normal for one person to be more inclined to paying bills or balancing the checkbook and that’s okay. Both of you don’t need to physically do these steps but the person who isn’t responsible cannot be completely uninvolved either. Sometimes I see couples for their very first visit and the woman is crying because she’s so stressed about money and her spouse has no idea why she’s crying (this goes both ways- the woman is not always the one responsible for the family finances).
Solution: Step up the communication!
Easier said than done, I know. I could have an entire post about communication alone. It all boils down to making a commitment. Aim for twice each month- sit down with a spouse, pour a glass of wine, and try to make the conversation as fun and relaxed as possible. If you handle the bills, do NOT get your spouse involved only when something goes wrong. If he is only brought on board to put out a fire, this won’t help the situation. Share small achievements too!
Issue 3: Saying “need” in place of “want”
A better cell phone, a landscaper, a new car, nicer clothes, and the list goes on and on.
Solution: Change your choice of words and your mindset will follow.
You can absolutely have all the things listed above and even more but realize they are wants and not needs. Ask yourself, “What is it that I truly need?” Everything else is a want.
Issue 4: Paying bills late
This costs you so much money! I have clients who easily spend over $100 each month on late fees. Most of the time, they have the money to pay the bill they just forget or they weren’t paying attention.
Solution: Systematize, Make a list and check it twice
Make a list of all your bills, the approximately amount, and their due dates. Sort the list in order of when the bill is due. Check the bills off as you pay them each month. It doesn’t have to be anything elaborate. Remember, simple and straightforward is the best!
Issue 5: Not paying attention
When was the last time you looked at your cable bill? How about your pay stub? I save my clients sometimes hundreds of dollars simply by cancelling a service they didn’t even realize they were paying for.
Solution: Pay attention!
You don’t have to necessarily look at every single bill every single month, but you should be reviewing all of them a few times each year. This is especially important if you bundle your phone, internet, and cable services. It’s also especially important if you have a credit card. At some point, you may have signed up for the “credit monitoring” service through your credit card company without even realizing it. Your credit card statement is one that should be reviewed each month; make sure all of the charges were made by you!
If you have any of these bad habits, I understand. They can sneak up on you! But now that you’re aware of it, make a conscious effort to change it and don’t be afraid to ask for help if needed!
Fiscal Fitness Phoenix offers personal training for your finances. We offer a hands-on approach to getting you back on track and showing you how to stay there. Learn how to spend wisely, save purposefully, communicate with your spouse, and create financial wellness for you and your family. Sessions are held in Gilbert, AZ