When it comes to personal finance, our habits can really make or break us. When we’re able to adopt positive financial habits, the benefits are endless: a better credit score, less financial-induced stress, a bigger savings account balance…the list goes on and on. Unfortunately, many of us have also taken on financial habits that could actually end up hurting us. Here are three financial habits you might want to consider breaking.
1. Spending More Than You Want to Earn Rewards Points
Provided they’re used responsibly, rewards credit cards can be an awesome thing. However, if you find yourself using a credit card just so you can rack up more points, you might be in for a world of trouble. This can be incredibly problematic if you’re trying to follow a strict budget or struggle to keep yourself from splurging on frivolous purchases.
One way you can break this bad habit is to only use your rewards card for regular, monthly expenses. For example: let’s say you decide to leave your card at home and only use it to make automatic payments on your phone bill, gym membership dues, and car insurance payment – which you then pay back in full every month. This could help keep you from making erratic purchases, while also still providing you with a steady stream of rewards points.
2. Ignoring Your Bills
Coming home to a big pile of bills is a drag, there’s no doubt about it. But tossing them onto the coffee table and ignoring them for weeks on end can have terrible consequences for your financial well-being. Consistently ignoring your bills is a sure way to find yourself missing your payment due dates, which could have a really negative impact on your credit scores. If you want to see how your debt is affecting your scores, there are many ways to get your credit scores for free, including through Credit.com.
A simple way to combat bill procrastination is to start being proactive. Whenever you find yourself faced with a bill, tackle it immediately and without hesitation. While it might be a bit of a struggle at first, over time you can reap the rewards of having less finance-related stress. Of course, if you still find yourself having trouble making your payments on time, there’s always automatic bill payment.
3. Cycling Your Debt Without Fixing the Real Problem
If you find yourself constantly consolidating debt or transferring balances to new credit cards, you might have developed a habit for debt swapping. While having a lower interest rate and one monthly payment can definitely help solve short-term problems for you, if you do it all the time you could be avoiding the underlying issue. In fact, it might even be keeping you from coming to terms with the behaviors that are forcing you into an almost perpetual state of debt.
If you think you’ve developed a habit for debt swapping, chances are it’s because you’re having a difficult time living within your means and maintaining a positive debt-to-income ratio. Building a budget could reveal to you how much you’re overspending each month and help you uncover ways to cut back and save. In time, you should be able to erase the debt you’ve accumulated and find yourself on much more stable ground. (This free calculator can help you figure out how long it will take to pay off your credit cards.)
For most of us, changing our behavior isn’t as simple as flipping switch, so it may take a lot of time and effort. Starting is the hardest part but, I can assure you, it gets easier with time.
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This article originally appeared on Credit.com.