Nothing wrecks your finances more than a few bad habits. Think about it, you impulse spend at the grocery store(20 bucks lets say), you impulse spend at the clothing store(30 bucks), and you impulse spend on some electronics,(50 bucks) then you impulse buy your self some fast food lunch(5 bucks). That is $105 dollars you didn’t NEED to spend.

My personal financial bad habit is Impulse buying. Off the top of my head, i can think of a few. I bough a video game last week ($49.99) i buy food when i don’t need to, i bought a WaterPik (dental hygiene machine, $40), and maybe more i can’t remember. I could have easily saved myself $100+ just by avoiding the impulse to buy these things. I do not NEED them, but i wanted them, so i bought them.

Did you know that if you pick a product up, you will develop an attachment to it within 30 seconds? Wow i need to stop picking things up that i do not intend to buy. There is more info about The Science of Impulse Buying Here.

But Here are some other Bad Personal Finance Habits.

1. Making Minimum payments to bills
2. Making Late Payments
3. Using a credit card even though you have cash (Fastest way to get into debt!)
4. Using/Owning a stores retail card (please slit your wrist with the card if you own one, they are killing you with interest anyways.)
5. Not Checking credit report/score.
6. Not Saving
7. Impulse Spending
8. Living on more than you make

These are just a few and you can find more here.

So what can you do? Start Forming Good habits.

“Scientists agree that the average person needs at least 3 weeks to form a good habit.” – From WikiHow

If you have any of these bad habits listed above, they can be fixed. Here are some ways. Schedule Payments to credit card bills that are more than the minimum, that takes care of paying the minimum, AND the late payment bad habit.

If you use credit cards way more than you use cash, leave it at home for a month, see if you even miss using it.

If you own a Retail store card, Pay it off and never sign up for them again. You will be saving yourself a lot of money, many store cards charge close to 30% interest!

Check your credit score Monthly using www.creditkarma.com! It is free and does not count as a Hard credit inquiry.

Automate Your savings plan! If you do not have an Online savings account right now, click on the ING Direct link on the Right hand side of this page and sign up NOW! You get great interest rates, NO FEES, NO MINIMUMS, NO HASSLE. SO many benefits and NO downsides. That is a bank worth using!

Once you have the savings account open, set up automatic savings deposits!

And last but not least, STOP IMPULSE SPENDING! Yes i know it is not easy, i struggle with this, but i recently came across a website called Habit Forge, and it is a web app that helps form new good habits.

All you do is sign up, enter the habit you want to start and each day it will email you asking if you were successful with the habit. You reply yes or no, and it compiles data. It goes on for 21 days. (3 weeks to form a good habit).

So for my case, each day i get emailed asking if i was successful in Avoiding Impulse Spending. So far it has been going good! i have missed a few days, but i am being honest, and at the end i will know if i am cured of the bad habit or not!

Check it out, sign up free! at www.habitforge.com

As i mentioned before selling belongings is a great way to get rid of debt, selling off stock that you do not care about much is an even better way.

A friend of mine recently found himself in a bit of a jam with his medical bills. He remembered that his old job offered stock options and he had taken advantage of it and invested about $500 in the company stock. He left the company a few years back and never got around to cashing out his stock, or rolling over his 401k into a Roth IRA. So when he found himself in this credit jam, he cashed out his stocks and paid it off.

“I pulled out my stocks and put it into bills. I was saving it for emergencies but the bills had to be paid so it worked” -Jason

It was an easy fix, it did not cause any problems for him, and essentially helped him out. Sure some might not advise cashing in investments, but any more earned on the stocks would be canceled out by Debt Interest.

Action was the main issue here, he had to act for this method to work. Sure you can talk about all the stuff you can do to get out of debt, but until you do it, you won’t get any further than before.

Note: This method only works if you have invested in stocks in the beginning.

Your Bank Hates You

by Matt Daemon

Did you know that your bank hates you? It does. That might be obvious for some but it needs to be said out loud for everyone else.

When you see commercials for your bank, they always mention how the bank helps people (help me into debt? no thanks). There are flowers and sunshine and puppy dogs etc. until you are left with a warm fuzzy feeling about your bank. They help people buy houses and start businesses and invest in their futures, right? You might think the bank was altruistic after watching enough of these ads.

When you walk inside the bank you see posters of pretty much the same thing. Happy people, smiling children, people buying a new home etc. The tellers and people you see working inside are polite and dressed nice. The bank is your friend right?

Fact #1 The bank is a business established for making a profit.

That’s why there are fees and charges for everything imaginable.

Fact #2 The bank has no heart and no soul

If the bank will make $1 more by repossessing your house and it can legally do so, it will.

Fact #3 The bank IS happy to lend you money, because you will pay back more more.

The bank would love for you to borrow money at the highest APR they can get away with.

Fact #4 The bank will trick you if it has to

Nobody reads the fine print and understands it. There are so many catches and loopholes and in the end, it doesn’t matter because the bank always reserves the right to change all the rules at any time.

Fact #5 You have no rights

Take a look at any agreement you have with the bank and you’ll see that all your rights are waived and you have nothing.

Think about this the next time you consider borrowing money from the bank. If you are late with one payment, for any reason, your APR will be jacked up to the maximum allowable by law. If they can take your house, they will. Look how many houses have been repossessed in the last 2 years. There will be no loving caring bank to ‘help’ you at any time. Expect to be nickel and dimed. Go inside the bank – fee. Use ATM – fee. Pay by phone – fee. Overdraft – several fees. They are super quick to take the money out of your account when you make purchases and withdrawals, but very slow to credit your account when you deposit.

About 10 years ago I got some cash advance checks for a credit card. They come regularly like candy every month with promises of 0% APR for months or whatever BS. Normally I shred them instantly, but this one time i needed about $200 for a present for my gf so I saved one and used it. The next day I get a call from the merchant saying the bank wouldn’t honor the check, I had to go in and pay them in cash, very embarrasing. I had a credit limit of thousands with no balance and they wouldn’t honor a $200 cash advance check they had sent me??! I called the bank to find out the reason they did this and there was some lame excuse like the checks aren’t valid for all purchases, only certain types of purchases are authorized and I’m supposed to call them. It was Chase and I cancelled my card with them immediately.

Another time, I was about to use a cash advance offer from Bank of America because it advertised 0% for 12 months etc. but when after looking at the fine print they charge incredible amount up front to get the cash advance, it was around 10% of the amount of the advance I was thinking about… does this make sense?

When I was around 19 I was pretty irresponsible with my first credit card. I racked up like $500 which was a lot at the time for me. When I finally paid it off I was so happy. I got a couple statements from them but didn’t even open them because I knew it was paid. 3 months later debt collectors are calling me because the $4 of interest that accrued between the time my statement was mailed to the time I paid (like 1 week or less) had racked up almost $300 in charges and fees. On top of that, I had the bank collection company calling me daily for weeks until I was able to pay it. This was Cross Country Bank, later sold to Chase I believe. Same corporate greed, different name.

Last story- I applied for a car loan at BofA for about $11,000 maybe 7 years ago. They charged me $70 for the application fee and said they would let me know in about 2 days if I was approved or not. 3 days later no word from them so I called and was basically told to STFU and wait. A week later I called and was brushed off again. 3 days after that I called back and was told ‘Oh, nobody told you? Your loan was denied’. So basically I spent $70 to be run around by the bank for 2 weeks. How can I get into that business.

My hatred of BofA is tempered by the fact that they’re all the same. They all offer you 0.001% on your savings and try to get 12-33% on your loans. There is no alternative. I read the consumerist frequently and have the impression that Chase is slightly worse in terms of customer service so at least I have that to be thankful for.

I hope this will motivate someone to put their credit card down. If you just have to use it, go to my website here EyewearCases.com and design personalized eyeglass and sunglass cases for your whole family online (I accept credit cards). Post your bank horror stories below.

I recently had the opportunity to talk with a friend who took a very smart, but different approach to paying off debt.

His debts totaled about $14K and was diversified between a car loan, line of credit, school bills, and medical bills. He did not have a credit card, and still does not due to his lack of interest in them. This does show how ever that credit cards are not the only way of creating overwhelming debt.

As explained by himself, the way he got into debt is very similar to the way I got into debt. Instead of using a credit card and increasing the limit he used his personal line of credit loan. He also was paying for schooling out of pocket, and did not take out any loans. His auto loan was the biggest expense of them all, originating at $8,000 dollars out the door. With a 10% APR he was looking at $2,199 extra cost in interest. A car loan that was going to cost him $10,199 in the long run was weighing down on him.

What steps did he take to get rid of debt?

First off he sold his car. This is something none of you babies would do, and even myself wouldn’t do (notice how i did say COULDN’T) I feel strongly that i need my car, and i am sure all of you do to. He obviously felt differently. He got rid of a major portion of his debt, just with this one step. As mentioned before, by paying off his car loan he avoided paying $2,200 extra in interest. So i think this was very smart on his part. He can regroup, save up, and buy a different car with a better APR. (now that he knows me and has access to my financial wisdom!)

Secondly, he talked with debt collection agents. When the rest of the world is ignoring debt collectors, he had the brains to talk to them. This was a huge step for him paying off debts that were overwhelming. He spoke with a debt collections agent and was able to settle some of his debts with 50% off his original amount. He did this with just a few phone calls, and promising to pay a certain amount each month. He constantly checked in with the agency and made sure they knew he was actively paying off the debt. This scored him some points and they were able to settle with him for much less that if he ignored them. If you have bills you can not pay, the worst thing you can do is default on it. It is much more beneficial to call up the lending company and ask some questions. Ask how they can help you. Let them know that you can not pay the full amount but that you do want to pay off the debt. Ignoring debt is the number one way to ruin your all important credit score, and rack up late fees, finance charges, APR increases, ect ect.

What made him take control of his debt?

He started being faced with bills he wasn’t sure if he could pay or not. He admitted that right before he sold his car he could not make the monthly minimum payment. That was the main reason he sold his car. “It was like i could never get out. The only way out was to make some kind of payment, but i could not make the minimum.” he said.

Before his massive debt payoff and consolidation his credit score was better than average. Ranging from 700-750. After the massive pay off, closing of a few accounts, his score is now averaging 600-650 but it is on the rise.

This 20 something paid off a total of $8,350 worth of debt using methods not commonly seen. Not everyone will agree with these methods. I know i don’t expect you to sell your car, but if you can not make the monthly payments, consider it.

He is now down to school tuition and medical bills that have no interest and working his way back to the top. He is becoming debt free and educating himself financially, starting to save, invest, and be more aware of credit cards, loans, APR, and how credit scores affect total cost of something.

I would say we all have a lot to learn from this individual. I know i do.

I generally buy goods and keep them for as long as possible or never sell them at all. I do this because items rarely hold their value for long periods of time.  I try to get the most of my money out of an item. When you go to sell an item, you will typically get about 50% of retail price. Most individuals tend to value their property more than others.  Let’s say you pay $100 for an item, you won’t want to let it go for less than $80, but the truth is most people would expect buy it for about  $50.

I sell items when I am in a jam and need the money. It hasn’t happened a lot but I know we all have these stories. Garage sales are a great way to sell possessions. I am constantly surprised at what people will buy. Selling items using a local classifieds is another option. Sites like www.craigslist.com, www.ksl.com, and www.ebay.com. I generally only sell items I know that I can get back when I have the money. I recently sold my Xbox 360 because I know I can always buy another when I am in a better financial position. (or when the new Call of Duty comes out ).

If you buy something and it doesn’t turn out as high of quality as expected or not what you needed, try to return it first. If that option is out, try selling it.

If you made a big purchase on credit, such as a TV or furniture, try to return it. Scrutinize your purchase, do you really need this? If not return it and feel good about not owing that much more in debt.