Healthy Spending Habits

Planning ahead is an essential part of financial responsibility. A budget is a financial plan that lays out all of your monthly income and details how you plan to spend each dollar of income that you earn. Budgeting can help you make sure you have enough money to cover all of your expenses and determine exactly how much disposable income you may spend on luxuries like entertainment and shopping.

Creating a budget is often easier than sticking to it. You might plan to spend a given amount on entertainment and going out to eat, but your actual spending habits may deviate from your plans. Monitoring your spending habits by tracking account use and keeping receipts can help you determine whether you actually follow the budget you create. If your spending in certain areas exceeds your budget, reign in your spending or create a new budget that accounts for shifts in spending habits.

When you use a credit card, you are buying things with someone else's money. Borrowing money is expensive because you have to pay interest on debt in addition to the original amount that you borrow. Paying for purchases with a checking account or cash is a good spending habit because it prevents you from taking on debt. If you want to use credit cards for convenience, pay off your cards in full each month to avoid interest and accumulating a balance. Once you rack up a large credit card balance, it can be difficult to escape the debt.

Impulsive spending is one of the worst spending habits that you can have. Spontaneous purchases can lead to buyer's remorse and dwindling back account balances. If you buy things that you never planned to purchase, you are more likely to spend beyond your budget and take on debt. Creating shopping lists before you go to the store and sticking strictly to the items on the list is a healthy spending habit that can prevent impulsive spending.