Top 5 Bad Financial Habits to Break

Written by  //  February 18, 2016  //  CAREER & MONEY  //

By Taara Jackson

… Do you or someone you know have any bad financial habits? I do …

Most of us have one … or two … or several bad financial habits. From experience, my bad financial habits resulted in some very expensive mistakes. It’s ok! As long as bad financial habits are broken or at least controlled, they will have a minimal effect on your financial success. The first step is identifying your bad financial habits.

Here are the Top 5 bad financial habits to avoid that keep people from getting a positive grip on their finances.

Impulse shopping.  Impulse shopping happens unexpectedly sometimes. Think of shopping like alcohol. It should be done “responsibly” and can become addictive, if not careful. Make shopping a planned activity with a list or a budgeted amount.  Unplanned or impulse shopping may sabotage your spending plan / budget.  Also for large ticket items, give yourself 24 to 48 hours to shop for a better deal or to figure out if you really want it and can afford it. You’ll be glad you waited.

Retail therapy.  Retail therapy may help you feel good for a moment but the buyer’s remorse is painful. When you are emotionally down, distraught or highly emotional, avoid shopping or making any large purchases.  The more emotional we are, the less financially objective we become.  Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc. Your bank account will thank you when you start to feel better.

Overdraft protection.  Overdraft or “Courtesy Pay” is so convenient! However, overdraft protection (a financial oxymoron in my opinion) is relatively designed to allow you to overspend. It allows or approves checks or charges to go through even when you do not have enough in your account for a Fee.  A fee of $27 up to $35 is charged to your account for every overdraft, even if the amount runs $1 or $5 over the amount you have in your account. Generally it is like a very short-term line of credit with a ridiculously high effective interest rate. Now was that cup of coffee really worth $40? Besides, we spend more when we use debit cards. Use cash instead.

Savings tampering.  Savings is money set aside for a specific purpose like emergency, down payment of a house or car, school, etc. Avoid using savings for something that is outside of its purpose. The best way to do this is to establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away.

Financial promiscuity. Financial Promiscuity is when multiple credit cards are used for small purchases when cash should be used.  Avoid using credit to purchase that “value meal” or anything less than $50.  This will ensure that Financial STDs (Substantially Tremendous Debt) will not be slowly acquired.

By acknowledging our bad financial habits, we can focus on breaking and changing them. Some bad financial habits may be more challenging to break than others, but it can be done.  Contact a financial coach to help with ideas and techniques of replacing bad financial habits with good financial habits to help you reach your financial goals faster.

tarra jackson-new

Tarra Jackson, known as Madam Money, is an energetic & charismatic international speaker, educator, financial coach and blogger that shares real life experiences to help educate her audience about money and credit. Known for her dedication to financial literacy and community reinvestment, Tarra served her community as a Vice President of a financial institution in Atlanta, Georgia as a tenacious financial coach and lending partner. Her previous experience also includes Vice President of Lending at a financial institution in Delaware. For booking and general information about Tarra Jackson go to

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