How to Fix Your Bad Financial Habits

Financial Habits

Financial literacy is a skill that a fair few of us take for granted. Managing money can be a complex endeavour, and does not come all too easily to many adults or households in the country. Indeed, bad monetary habits are easy to form and hard to break, representing severe roadblocks for put-upon households in an historic period for personal finances.

But financial literacy is an attainable skill, and one which can be learnt at practically any pace. All that is required is a willingness to engage with some dry topics, and the conviction to turn around some key bad habits relating to money. What are those bad habits, and how can they be fixed?

Careless Spending

One of the bigger causes to personal cashflow problems, particularly outside of such events as the UK’s current cost-of-living crisis, is careless spending. Shopaholics are not ten a penny, but all of us will have experienced the pull of retail therapy before – and some of us don’t know how to stop.

Something as innocuous as getting more than one takeaway meal a week can be severely impactful on finances in the long term. Logging purchases and taking notes on how often you buy can help illuminate if you are overspending, and help you view your purchase history more critically.


Careless spending or no, the real rub for people struggling with money can come in the form of debt. Debt is not necessarily a bad thing to have; mortgages are a form of debt, while credit cards can be used pragmatically to reduce the impact of bigger or emergency costs. However, multiple sources of debt, and no clear route out, can make life difficult.

One of the simpler ways to make debt easier to manage is to use a debt consolidation loan to combine multiple individual debts. This way, you are only paying off one debt at one rate of interest, and your creditors are satisfied sooner.


It can be impossible to meaningfully grow your savings when in debt – and, indeed, it is not recommended that you try. Debt minimises the impact of savings, and can counteract the interest you would earn. As such, savings strategies should only be implemented once major debts are cleared.

When said debts are under control, it is nonetheless important to start saving the right way. Leaving all of your money in your current account will only make that money easier to spend. Even if you don’t spend it, it won’t work as well for you as it could in another account, such as a cash ISA or high-interest savings account. There is also the matter of your pension to consider.

Having a goal in mind can help inform your savings strategy. Saving for a house would make a LISA more appropriate for your ambitions, while aiming for financial independence could make utilising a global index fund a better way to save.

Will Fastiggi
Will Fastiggi

Originally from England, Will is an Upper Primary Coordinator now living in Brazil. He is passionate about making the most of technology to enrich the education of students.

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