9 Signs That You’re Bad With Money (and What You Can Do to Fix It)

There are dead giveaways when someone's bad with money. Read about the signs that someone's bad with money and how to fix those mistakes.

Let’s be honest. Not everyone knows how to responsibly handle their money. It’s not necessarily their fault. It may be that they weren’t shown the ropes while growing up and never had the chance to develop good financial habits. They engage in certain behaviors that let you know that they’re bad with money. Fortunately, for every problem, there’s a fix.

1. You don’t know how much money is in your checking/savings account.

You might be bad with money if you don’t know how much money you have. While you don’t have to track your money down to the penny, you should have a good idea of how much money is in your bank account at any given moment. When you don’t know much money you actually have, you’re more likely to overspend. You’ll freely swipe that credit card thinking and hoping you can just pay it off at the end of the month.

How to Fix It

Check your account balance once a week. Almost all banks these days offer online banking so you can easily check your account from your phone or laptop. Unless there are emergency circumstances, you generally should not spend more money than what you have actually have. I also find it helpful to allocate a certain amount of money towards discretionary spending every month. My weakness is dining out so I set aside $100 every month just for that purpose. Once I run out of that $100, I cut off all eating out until the next month.

2. You buy things on credit but don’t have the money to pay it off.

Are you an impulse shopper? Do you buy things you like without regard to whether you have money to pay it off? These habits can lead you to look at a credit card bill every month that you can’t pay. What’s the big deal? By carrying a balance from month to month, you’ll rack up interest. If you skip a payment, you’re looking at huge penalties against your credit score.

How to Fix It

Until you can responsibly handle credit, it’s worthwhile to consider switching to a cash only system. Only charge something if you know for certain that you can pay it off in full. Don’t play the travel hacking game to get airline miles when you have a history of not paying your credit card bill in full every month. If you just can’t seem to let go of your credit card shopping, put your card in a tupperware filled with water and freeze it. Yes, literally, freeze it. The amount of time it takes for the ice to thaw can be enough to curb your impulse shopping.

3. You don’t have a retirement account.

You think you don’t make enough money to save for retirement. Perhaps you’re deterred because the funds you want to buy into require too much money. You’ve heard amazing things about mutual funds but they require initial investments of $3,000 and that’s just out of your reach so you don’t even bother.

How to Fix It

It’s true that many mutual funds require an initial investment of $3,000. However, the Vanguard STAR fund only requires $1,000 to start investing compared to the normal $3,000. I understand, $1,000 is still a significant sum of money. If you don’t have that amount right now, it’s okay. Set aside whatever amount of money you can every week in a dedicated bank account. The amount doesn’t matter so much as consistency. Once you reach $1,000, you can start investing in the fund.

4. You don’t use a bank.

You’ve been burned by banks before. No matter what you did, you were constantly being slapped by fees. Maintenance fees, ATM fees, overdraft fees, the penalties seem endless. Since you don’t use a bank and can’t get your paychecks direct deposited, you have to go through the hassle of having to cash your paycheck every payday. What’s worse, some employers choose to pay hourly-wage workers via debit cards if those workers don’t use direct deposit.

How to Fix It

One attractive option is using online banks. I personally use Capital One 360, formerly ING Direct. There are no minimum balance requirement and the interest rates offered is much higher than traditional brick and mortar banks. If you prefer to use a bank that has a physical location near you, there’s a solution. Take advantage of direct deposits. Nine times out of ten, that will be enough for banks to waive the monthly maintenance fees.

5. You pay late fees because you forget to pay bills on time.

You have a habit of paying bills late, and the excuses are endless. Whether you’re too busy to worry about bill due dates or you have more important stuff to worry about, there’s always something. Plus, the late fees aren’t that much so what’s the big deal. Let’s conduct a mental exercise. When you see people on the streets asking for money, do you give it to them? Do you throw $5 in the tip jar at Starbucks or fast-service restaurants? If you don’t do it because you don’t want to part with your money, then why pay late fees?

How to Fix It

You can set up auto pay so that your bill gets paid automatically every billing cycle. If you’d rather review the bill before paying it, set aside designated time every month to review and pay your bills. Laziness is a bad excuse for paying bills late. You’re literally throwing money away!

6. You have no regard for spare change.

When you buy something in cash and get change back, you toss the coins in your car, on the dining table, or between the couch cushions. You don’t really care because it’s just spare change.  This is a terrible attitude. Money, no matter the denomination, is precious and should be treated as such.

How to Fix It

Designate a specific spot for coins. Empty your purse and pockets nightly and deposit the coins in this spot. Now that everything can be paid with a credit card, I understand there’s less opportunity to use up coins. But…it’s still money. I keep a stash of coins at work for when I want munchies from the vending machine. You can also keep some in an old prescription bottle and have it in your car for tolls and parking meters. You can also treat the spare change as fun money. Count up the change at the end of the year and go spend it on whatever you want!

7. You need to make a return but can’t find the receipt.

How often has this happened to you, you buy something that doesn’t fit so you return it at the store. Problem is, the store won’t accept a return without a receipt and you have no clue where the receipt is. The store may give you store credit for returning something without a receipt but store credit is not nearly as good as cold, hard cash.

How to Fix It

Leave a shoebox in a designated area just for receipts. When you come home everyday, empty your wallet and pockets and leave the receipts in the box. Go through this box weekly to see what you need to keep and what to toss. You can go digital by snapping pictures of your receipts or scanning them. Having a designated spot for receipts means you can always find them when needed.

8. Your paycheck is used to pay off last month’s debts.

You don’t look forward to payday because you know your paycheck needs to go towards paying off last month’s expenses. Month after month, the cycle repeats. You have the best intentions at the beginning of every month yet at month end, you always find yourself in the hole.

How to Fix It

At the beginning of every month, try to set aside at least 5% of your take home pay in an account that’s not to be touched. As you work your way out of the paycheck-to-paycheck cycle, increase the percentage of your saving. You need to save money first, spend money second. For every paycheck you bring home, you need to first set aside money for savings, then take care of fixed expenses like rent/mortgage and utilities, and spend on dining out and entertainment your last priority. With time, you’ll have enough money in your savings account that you don’t have to wait for the next paycheck in order to pay bills.

9. You never check your credit report.

You know how much money you have saved, you have a six-figure investment account so your credit report must be perfect. Why bother checking? That’s kind of like someone saying they have straight white teeth so they don’t need to go to the dentist (not a perfect analogy but I’ve actually heard someone say that). Well, your savings and credit are two separate issues. Your credit report can shows you any inaccuracies on your credit profile including whether there are opened accounts that you don’t recognize. As the recent Equifax breach teaches us, you can’t be too careful.

How to Fix It

Federal law entitles all of us to one free credit report a year from each of the 3 major credit reporting bureaus: TansUnion, Experian, and Equifax. You can certainly buy credit reports for a fee but why would you do that when you can get them for free?!?! The site www.annualcreditreport.com is where you go to get your free copy. I request my free report from a different agency every 4 months instead of requesting them all at once. That way, I’m more likely to detect suspcious activity early on.

What do you think are signs that someone’s bad with money?

There are dead giveaways when someone's bad with money. Read about the signs that someone's bad with money and how to fix those mistakes.



2 Replies to “9 Signs That You’re Bad With Money (and What You Can Do to Fix It)”

  1. Checking your balances at least once a week is a good tip. You would be aware of how much you have constantly and keep track of your money.
    We have a three years worth of receipts and it has come in handy. I sort it out by the month of the purchase and it has come in handy. Whenever we want to return an item we would just go through the receipt box and find it.

    1. Three years worth of receipts! That’s impressive. I think the key is to stay organized and know where everything is. I like keeping receipts for car maintenance and repairs. They help me keep track of my cars maintenance history and they’re handy when trying to sell the car.

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