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5 bad financial habits you can break today

NEED TO KNOW
  • HLN's Jen Westhoven says you can trick yourself into saving
  • You can actually save $1 million -- little by little, of course
5 bad financial habits you can break today

How to break bad financial habits

How to break bad financial habits

The lunchtime change that saves big $$

The lunchtime change that saves big $$

You need HOW MUCH money to retire?

You need HOW MUCH money to retire?

While getting in good physical shape is one of the most popular New Year’s resolutions, getting in financial shape is another big one. 

The best way to do the latter is by targeting a few of your bad money habits and breaking them one by one:

Bad Habit No. 1: You never save enough money for what you really want  
HLN's Jen Westhoven says you need to trick yourself into saving money. Use your own Jedi mind tricks, like Obi-Wan Kenobi in “Star Wars”. Set up several separate bank accounts and label them with your goals (“ski trip” or “new furnace”). Research has shown that if you do this, you’re going to feel more guilty about dipping into that money, and you will save 30% more. 

Bad Habit No. 2: Stop the catalog madness  
Throw out catalogs as soon as they arrive in the mail. Furthermore, have retailers stop sending them to you. Why? Reading them will only encourage you to buy, buy, buy. Also, drop any daily "deal’" emails you get (like Groupon or Living Social). Even if it’s a great deal, it means spending money, and that’s likely to put you deeper into debt.

Bad Habit No. 3: Get moving on that retirement plan  
Saving for retirement overwhelms a lot of people. One rule of thumb is to save 12 times your salary. Others say, to be safe, save $1 million. Some people think there is no way they'll ever be able to save that much money, so they just give up. Bad idea. Remember the old saying -- how do you eat an elephant? One bite at a time. Just start saving what you can -- even if it’s only $50 a paycheck. 

Bad Habit No. 4: Your food budget
You might be amazed how much money you spend buying a cup of coffee on your way to work, buying lunch every day at work and raiding the vending machine. You can save a lot of money by brown-bagging your lunch one week out of every month. The money you’re not spending can go right into your savings plan.

Bad Habit No. 5: Stop those impulse purchases 
Don’t buy anything impulsively. AARP consumer advocate Ron Burley told us about a system he has with his wife. Any purchase over $200 has to be discussed, and they have to wait at least 24 hours to buy it. He says after going through this process, several items they almost purchased didn’t seem so important to buy after all.

Morning Express with Robin Meade airs Monday through Friday at 6 a.m. ET on HLN. Like the show on Facebook, follow Jennifer Westhoven on Twitter: @JenWesthoven.

 

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