By Cameron Huddleston
WWR Article Summary (tl;dr) Carla Dearing, CEO of online financial wellness service “Sum180” says the key to breaking harmful financial habits is self-awareness.
Bad habits, we all have them. Some are worse than others, and some can wreak havoc on your finances. You might be doing things with your money again and again that are keeping you in a financial rut. And that financial rut can have a long-term impact on your overall financial health.
If you want to break the paycheck-to-paycheck cycle, it’s time to pinpoint your bad money habits and devise a plan to end them. “The key to breaking these harmful financial habits is self-awareness,” said Carla Dearing, CEO of online financial wellness service Sum180. “It’s not always easy, but once you recognize an unhealthy habit in yourself, you have the power to change it.”
These are the first steps to take.
STOP IGNORING YOUR MONEY
When it comes to your finances, your biggest problem could stem from a lack of monitoring your spending. You don’t regularly check your bank account. You don’t know what your credit card balance is. You can’t remember the last time you checked your credit report or score. In other words, you’re ignoring your money.
It’s gotten easier for people to ignore their finances because so many no longer receive paper statements in the mail, Dearing said. Those statements, especially bank statements, serve as a monthly reminder to take a look at your financial picture. Without that cue, people often aren’t taking time to be aware of where they stand, she said.
To stop ignoring your money, you actually need to create a habit of checking your accounts regularly. Dearing recommends setting an alert on your phone or online calendar as a reminder to check your bank account, credit card balances and savings account. The frequency of those reminders depends on what works for you _ perhaps weekly, but at least monthly.