Nine bad money habits you should leave behind this year

As the year comes to a close, Margaret says that one of the habits that people regret is living beyond their means or relying too much on mobile loans. Others wish they had tracked their expenses or said “no” more often to unnecessary spending. People then realise too late how small daily decisions determine financial freedom or struggle.

She says money habits are usually driven by emotions and not logic, stemming from comfort, fear, or upbringing. People can spend to soothe, celebrate, or escape; therefore, recognising emotional spending, like retail therapy after stress, is the first step toward healthier financial control.

She advises tracking your moods when you spend; if it is boredom, stress, or influence. Patterns will emerge, and awareness will turn impulsive habits into purposeful choices. 

“Knowing better doesn’t automatically mean doing better; it takes unlearning emotional spending and replacing it with intentional choices,” she says.

Margaret believes that a person’s mindset is what drives their budgeting habits. Being too rigid or too vague, creating unrealistic budgets that don’t reflect real life and then abandoning them, and noting expenses without tracking are some of the habits to drop.

Also, by shifting from “I can’t afford it” to “How can I afford it responsibly?”, you start making empowered decisions. She further discourages sticking to the usual 50/30/20 budgeting rule, as it doesn’t always fit in a high-inflation economy. 

“It helps to be flexible; some months you may save 10 per cent while 30 per cent in others. The goal is to stay consistent,” she says.

Replace impulse spending with pause spending, where you give yourself 24 hours before buying non-essentials, she says. Use that time to review your budget or remind yourself of a bigger goal. You can also channel that emotional urge into saving challenges or journaling your spending triggers.

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She notes that saving whatever is left after spending rarely works. Another mistake is keeping all savings in one account, which makes withdrawals too tempting. Instead, automate savings at the start of the month and separate funds for goals.

Instant loans, buy-now-pay-later offers, and gambling apps top the list of tools that make it too easy to spend borrowed money.

Margaret advises viewing loans as a cost rather than a convenience. Every time you borrow, you’re paying tomorrow’s income for today’s pleasure. She encourages building an emergency fund to replace that dependency and seeing credit as a tool for investment, not survival. Further, avoid using loans for non-income-generating activities.

Things like constantly upgrading phones or spending money on an anticipated income fall here. She defines a genuine priority as one that has long-term benefit and moves you closer to stability or growth. A disguised habit gives short-term pleasure but long-term regret.

Social media fuels comparison culture, making people feel behind or inadequate. It triggers spending to fit in rather than to grow. It normalises performative living, that is, spending to project success instead of building it, she says.

“Real financial confidence comes from privacy, discipline, and peace of mind,” she adds.

If money constantly causes guilt, anxiety, or overcompensation, like overspending to impress or saving obsessively out of fear, Margaret urges re-evaluating your relationship with it. She notes that it starts with recognising unhealthy beliefs around money and reframing them, as well as taking action towards your goals.