You knew the experience from that internship or entry-level job would pay off someday, but did you ever think it could hurt you, as well?
If you do anything long enough, it’ll become a habit. And those thrifty tricks we used to weather the rough stretches of road and everyday struggles can linger like rain clouds on the horizon, occasionally dampening the progress we make toward financial stability.
The “poverty mentality” is a mindset that helps stretch our dollars and cents when they’re in short supply. No, it doesn’t mean you’re poor. But it could mean it’s time to rethink some of your financial habits. Those high-stakes moves you made to survive that period could hinder your financial gains, if they’re still in your life today.
Review these five tips to find out how you can drop short-sighted habits of the past and replace them with strategies for winning the long game.
Bad Habit No. 1: Drip Feeding Credit Cards the Monthly Minimum
You already know it. It’s hard to get ahead doing anything in life if you’re only putting in the minimal effort, and it’s certainly true of debt.
When you’re struggling every day just to make ends meet, making your minimum credit card payment every month might be the most you can do.
After progressing in your career and becoming financially stable, you’ll need to get more aggressive in paying down your debt in order to put it behind you.
As Spider-Man learned from his uncle, “With great power comes great responsibility.”
Your credit card company doesn’t really care whether you make the monthly minimum or pay down your debt. It’s just getting rich by ripping you off with high-interest rates — some up to 36%. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
It takes two minutes to see if you qualify for up to $50,000 online. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.
Bad Habit No. 2: Overdrafting, Overdrafting and Overdrafting
You aren’t crazy. The banks are out to get you — and your hard-earned money.
They’ll tell you that they’ve got your back by charging you only $36 or so to cover purchases you don’t have the funds to cover.
Out of the other side of their mouths, they’ll disavow overdraft charges and offer you “protection” from overdrafts. This usually consists of them charging you fees to move money from your savings account to protect from overdraft fees.
You can break the sadistic cycle of overdrafting and take the next steps toward financial stability by simply declining automatic overdrafts and steering clear of overdraft protection.
Embarrassing, yes, but it’s not the end of the world to have your debit card declined because you turned off automatic overdrafts. You can quickly move the money from your savings account, or lean a credit card until your checking account recovers.
Credit can serve as a powerful tool in helping you break the cycle of overdrafts and rising above the everyday struggle. And if you’re concerned about your score, try using a free website called Credit Sesame.
Within two minutes, you’ll get access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).
James Cooper, of Atlanta, used Credit Sesame to raise his credit score nearly 300 points in six months.*** “They showed me the ins and outs — how to dot the I’s and cross the T’s,” he said.
Want to check for yourself? It’s free and only takes about 90 seconds to sign up.
***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.
Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.
Bad Habit No. 3: Casually Waiting for the Perfect Time to Start Investing
What, are you waiting until you’re just flush with cash before you start investing?
It’s easy to put off investing because it takes away from your disposable income and leaves you less room for stuff like more subscriptions – you know, the “pluses,” “nows” and “go’s” of the streaming world.
But remember: You’re playing the long game now. These are things you do to remain financially stable.
You really don’t need that much money to start investing now — and you can even get free stocks (worth $2.50 to $200!) if you know where to look.
Whether you’ve got $5, $100 or $800 to spare, you can start investing with Robinhood.
Yeah, you’ve probably heard of Robinhood. Both investing beginners and pros love it because it doesn’t charge commission fees, and you can buy and sell stocks for free — no limits. Plus, it’s super easy to use.
What’s best? When you download the app and fund your account (it takes no more than a few minutes), Robinhood drops a share of free stock into your account. It’s random, though, so that stock could be worth anywhere from $2.50 to $200 — a nice boost to help you build your investments.
Bad Habit No. 4: Insuring Everything, Except Your Life
You’ve got a contingency plan in place in case you’re involved in a car accident. Most likely, you have one in place for your home, as well. Maybe even the furred and feathered members of your family are covered by insurance as well, so why not your life?
Now’s a good time to start planning for the future by looking into a term life insurance policy.
You’re probably thinking: I don’t have the time or money for that. But your application can take minutes — and, if you’re approved, you could leave your family $1 million by spending a low monthly fee on term life insurance with a company called Bestow.
The peace of mind of knowing your family is taken care of is priceless.
If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.
Bad Habit No. 5: Venturing Through Life Without a Safety Net
One of the bigger tests you’ll face in shaking the poverty mentality is saving for rainy days.
Is a sunshower considered rainy? Should I wait till the rain stops before I refill my emergency savings? How much do I need to protect from the rain?
The answers to these musings will all depend on you and your circumstances, but they’ll get much easier to answer as you build up your emergency fund.
When you’re trying to save up an emergency fund, is there anything better than free money? Yeah, we didn’t think so. Here’s the thing, though:
Taking advantage of free money is one of the best ways to kickstart your emergency savings — and you’re probably leaving free money on the table every day.
Yep. If you’re not earning cash for every dollar you spend, you’re missing out on free money.
But a debit card called Aspiration lets you earn up to 10% cash back on your spending. Take groceries, for example, it gives you .5% cash back at Walmart and Target, and 5% cash back at Brandless (for a full list of cash-back percentages, visit Aspiration’s website).
It takes just five minutes to sign up for a new debit card with the Aspiration Spend and Save account.
This is one of the easiest ways to add money to that emergency fund.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.