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No one wants to waste money but that's exactly what bad money habits do. The worst part is that it's often difficult to realize that you're being affected by them until they're pointed out. Let's look at some common bad money habits, and walk through how to break each one.

Unused Subscriptions

Subscriptions are convenient — you get a service and you pay for it each month automatically. It's a great system that works well. At least, it works until you stop using the subscription and forget to cancel the recurring payment.

Gym memberships are a prime example. How often have you found yourself paying even when you haven't been to the gym in several months? Some other common ones are mobile apps, magazines, and TV subscriptions like HBO or Netflix.

Go through your bank and credit card statements, and try to identify monthly recurring charges. Are the charges for things you're still using or want? If not, cancel them.

Impulse Buys

An impulse buy is when you purchase something that you had no idea you were going to buy. This usually happens when you're in a store and see an item you "just have to have." It can be a few dollars to well over a $100 purchase.

The key to curbing impulse buys is to recognize that you are making an unplanned purchase. Then take a deep breath and leave the item on the shelf without buying it. Give it a week to see if you still need the item — you'll be surprised at how often you don't.

Even better is to create a list and start buying only what is on the list. If you see something you want, write it down on your list for next time. You'll have time to think about buying the item. By the time you go back to the store with a new list, the item may not even be on it.

The Simplified Budget

Once you get used to creating a list, the next step is to create a budget. The simplest way to create a budget is to start with your monthly income. Next, add in necessary expenses like electricity, rent, food, car payments, etc. Subtract your expenses from your income. If the amount is positive, this is your discretionary income. If the amount is negative, you may be living above your means.

If you have discretionary income, you can now add in your extras such as dining out and coffees on the go.

The Quick Coffee or Soft Drink

Regularly grabbing a coffee at your favorite spot can certainly add up. Once you put together a budget, you'll see how buying coffee regularly is making a dent in your budget.

Try a different tactic such as brewing coffee at home. Instead of buying coffee every day, cut back to once or twice a week. Then notice what impact it has on your monthly budget. You'll find that you have more money available at the end of each month.

Unnecessary Fees

Unnecessary fees are similar to unused subscriptions, but they're easily avoidable. Take credit card interest for example. Most often, you'll be charged a fee when you forget or can't pay your balance in full each month. Or worse, you forget to pay at all — incurring a hefty penalty. With the help of your budget and the other tips above, you'll be in a prime spot to work on paying your balance in full each month. Additionally, consider setting up auto payments through your credit card company so you never miss a payment.

Another fee that is avoidable is an overdraft checking account fee. Instead of paying this high fee, set up overdraft protection with your bank.

The battle to avoid bad money habits is about being aware that you're committing them in the first place. This is the only way you can work to break them, even if slowly at first. The sooner you take the necessary steps, though, the sooner you'll start saving more money.


This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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