7 Poor Money Habits You Learned Long Ago That Are Still Hurting You Today
Studies show that money habits are learned at an early age. Some research indicates that these habits, good and bad, may be in place by age 7. Almost all experts agree that sound financial practices should be started in childhood and reinforced throughout early adulthood. Unfortunately, many adults learned poor money management skills during their most formative years, leading to long-term financial struggles.
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Money mishaps may have been picked up because of what was modeled in a person’s household, while others are the result of a simple lack of understanding. Money, to many generations, is also still considered a taboo subject, meaning dinner-time conversations aren’t really centered around financial literacy.
At GOBankingRates, we surveyed over 1,000 adults to find out what bad financial practices they picked up during childhood and early adulthood that are still causing them problems. Almost across the board, their answers were the same as what many adults struggle with throughout their lifetimes. Here are seven poor money habits many folks learned long ago that are still hurting them today.
Using Credit Cards Too Much
According to those surveyed, over 33% said they learned the poor money habit of using credit cards too much to buy things during childhood. Another 37% said they developed the practice during early adulthood.
Ann Martin, director of operations at CreditDonkey, said, “As a young adult, I watched many of my acquaintances overextend themselves by relying too heavily on credit cards. Although credit card purchases can sometimes be downright necessary for unemployed (or underemployed) individuals, you can sometimes find yourself on a slippery slope that leads to overspending.”
She continued, “Start by tracking your credit card spending to overcome this poor money habit. You’ll often be shocked to find that you spend far more on your credit cards than you realize. This realization is an important first step in cutting back on spending and repairing your relationship with credit.”
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Not Prioritizing Saving
Another common money mishap among those surveyed was not prioritizing saving. A resounding 39% of respondents said they learned this habit during childhood, while 32% said they developed it during early adulthood.
Shawn Plummer, chartered retirement planning counselor with The Annuity Expert, explained, “As someone who understands and uses the best that the traditional and modern money habit philosophy can teach, I’d say a lot of it has to do with learning how to place limits on yourself, and of course, keeping yourself accountable for those limits. For example, when you decide to spend less or save more money for whatever reason, your first goal should be to set up systems that prevent you from abusing your own limits due to bad habits.”
He added, “Instead of keeping spare cash at your side — have your bank save up to 10-20% of your income or salary without allowing you to withdraw it so easily at the first sign of some inconvenience.”
Not Creating a Budget
Just over 34% of people surveyed said they learned the habit of not creating a budget during childhood, while 29% picked up the practice during early adulthood.
“To help curb your credit card spending when you’re shopping online, set a budget and spend only what fits into your budget,” said Melanie Musson, finance expert with Clearsurance.com. “It requires a lifestyle change, but it’s simple and something anyone can do.”
Impulse Shopping
Another common problem among respondents was impulse shopping. A little under 37% of those surveyed said they learned the poor spending habit as children, while 32% responded that they developed the issue during early adulthood.
Musson suggested, “If you’re in the habit of overusing your credit card, start shopping with cash. Eliminating a credit card altogether can make it difficult to purchase things online, but you can start by switching to cash for your in-person shopping.”
Not Paying Bills on Time
Of those surveyed, 19% said they developed the bad custom of not paying bills on time during childhood. When asked what poor money habits they developed during early adulthood, 16% indicated that it was failing to pay their bills on time.
Setting up automatic payments can help you avoid this mistake. However, It is important to be mindful of what you put to be withdrawn from your account each month. A set-and-forget attitude may result in you paying for subscription services and other things you don’t need for months on end.
Not Building an Emergency Fund
When asked, 35% of adults surveyed said they learned the poor practice of not building an emergency fund from childhood. 31% indicated it was a habit they developed during early adulthood.
David Kemmerer, CEO of CoinLedger, said, “Honestly, I think much of the time these types of poor money habits could benefit from the intervention of a financial professional such as a financial planner or advisor.”
He added, “Even if you meet once a month, or only for a few sessions, these professionals have the knowledge and the experience to look at your financial habits and give you solid, actionable tips for getting back on course according to your specific situation. That aside, I do tend to recommend financial literacy courses for just about anyone–but they can be especially helpful for young people needing to unlearn or relearn financial habits.”
Living Beyond Your Means
Finally, just over 27% of people responded that living beyond their means was one of the negative financial customs that they learned during childhood, while 23% said they developed it during early adulthood.
Musson noted, “Living beyond your means can be a habit that keeps you in debt and unable to recover from unexpected expenses. You may have to take drastic measures to curb your spending. If you’re living paycheck-to-paycheck, you can give up eating out or streaming subscriptions to help build a buffer.”
She continued, “But if you’re going into debt every month, you need a strategy to cut your spending and get out of debt. You may need to move to a lower-cost living situation. You could consider getting a roommate. You may also need to sell your expensive vehicle and start driving something with a lower payment.”
Methodology: GOBankingRates surveyed 1,008 Americans aged 18 and older from across the country between March 26 and April 1, 2024, asking twenty different questions: (1) Has a lack of financial literacy caused you to struggle with your money?; (2) Which current money hot topic is most confusing to you?; (3) Which money expert do you trust most for teaching you the basics of money?; (4) Since the pandemic started in 2020, do you think you have become smarter about your money?; (5) What poor money habits did you learn during your childhood? (select all that apply); (6) What poor money habits did you develop in your early adult years? (select all that apply); (7) What poor money habits have had an impact on your marriage/partnership? (select all that apply); (8) What poor money habits do you worry about passing on to your kids? (select all that apply); (9) What aspect of buying a car do you find most challenging/confusing?; (10) What aspect of buying a house do you find most challenging/confusing?; (11) What aspect of paying off debt do you find most challenging/confusing?; (12) What concerns you most about planning for retirement?; (13) What best describes your feelings about investing?; (14) How much have you saved in the last year?; (15) How much debt have you acquired in the last year, not including mortgage debt?; (16) Do you currently bring in enough money to cover your bills?; (17) How much do you think about your financial status?; (18) What best describes your feelings about managing your money?; (19) What is your monthly car payment?; and (20) How much income do you think is needed for a middle-class family to live comfortably?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: 7 Poor Money Habits You Learned Long Ago That Are Still Hurting You Today
