Bad Money Habits: How They Vary by Generation & How to Break Them for Good

Adam Wright |

What was the last money mistake you made?

If you’re like most folks, you’ve made at least one upsetting money mistake in the past year — and you’d like to do better.1

In fact, most folks admit their finances have not gotten better over the past year. And at least half of them say the real problem is that their money mistakes have turned into bad financial habits.1

Bad Money Habits by Generation

What exactly are those bad money habits that are setting us back?

It’s different for everyone. Still, generationally, many seem to share some of the same bad money habits, research shows.1

Here’s how those bad money habits break down by generation:

  • Gen Z stress-shops online more than any other generation. They’re also most likely to overpay on rent.
  • Millennials also turn to online shopping, with many pointing to late-night online shopping as their newer bad money habit. These folks also say that they’ve spent too much on rent and put too much money into cryptocurrency.
  • Gen X tend to say their biggest missteps with money are not saving enough for retirement and investing too much in crypto.
  • Boomers are more likely to buy with credit when they don’t have enough cash to back up those purchases.

The point is that everyone can make mistakes with money – and that if you’ve picked up some bad money habits recently, you’re not alone.

4 Bad Money Habits to Leave Behind in 2024

Better financial choices and habits are within your reach this year! It’s never too late to start making a change, no matter how many times you’ve tried to correct bad money habits in the past.

Here’s where to get started if you’re serious about kicking bad money habits and improving your financial life in 2024.

1. No Savings Goals

Most of us aren’t saving enough, and we know it because it’s the number one bad money habit self-identified across all generations.1

Part of the problem here is a lack of savings goals in the first place. Many of us aren’t taking the time to identify what we need to save or what it will take to get us there – and that’s making our savings goals elusive and intangible.

How to Break Bad Savings Habits: Be more deliberate with your savings. Set a goal for savings, and think about how much money you need to set aside for different types of savings, like your retirement versus an emergency savings fund. If you quantify your savings goals, it can be easier to get a grip on them and get closer to achieving them.

2. Unchecked Impulse Spending

Shopping can be a slippery slope for anyone, especially those of us who don’t have any guardrails on our spending habits.

That can mean impulse buys with planned purchases or shopping on the fly when you had no plans to buy in the first place. For younger generations, this can be really tempting with in-app purchases that take just a few clicks and don’t even really feel like actual money transactions.

However impulse spending happens, it can make your wallet a leaky sieve, draining funds that could be better used elsewhere.

How to Break Bad Spending Habits: Set up some rules and checkpoints for yourself, so you’re not spending recklessly. This could mean making lists for in-store shopping, so you only buy what you plan to pick up. It can also involve ordering for pickup only, so you don’t go into stores at all. You may even consider deleting shopping apps from your phone or setting up a rule for yourself so that you wait at least one day before buying items that aren’t necessities.

3. Racking Up a Ton of Debt

You can buy a lot more on layaway and credit these days than ever before. In fact, most major retailers offer their own layaway options, so you can buy now and pay later. On top of that, bigger purchases can often be financed with no interest plans for a certain period, with new lines of credit often coming with hefty interest rates.

All of that can make it easy to rack up a lot of debt very quickly – and to get into the minimum payment mindset. With that, you could end up shouldering a lot more debt than you really need to, and money that should go into your savings can end up going to interest payments and creditors, instead.

How to Break Bad Debt Habits: Always try to pay more than the minimum with your debt payments. If you’re considering taking on new debt, ask yourself if you can really afford the new expense and if you really need the item you’re considering buying. Also, focus on a zero-debt mindset, so you’re aggressively paying down debt, instead of looking to accumulate more.

4. Paying Unnecessary Fees

Paying money to use or access your money is another way we can throw away our hard-earned cash needlessly. That can come in the form of:

  • Out-of-network ATM fees
  • Overdraft fees
  • Transaction fees
  • Transfer and wire fees
  • Late payment fees
  • And more

In many cases, we’re incurring these fees simply because we’re in a hurry, we don’t read the fine print, or we’re just not paying attention to the bottom line.

How to Break Bad Fee Habits: Double-check your account balances, payment due dates, and banking fees. Before you transfer money, take money out of an ATM, or access your funds in other ways, check the fine print first. If you have to pay to do these things, look for the no-cost alternative, even if it means you have to switch banks or look for better deals on credit cards.

Now’s the Right Time to Break Your Bad Money Habits

Remember, you don’t have to shake bad money habits on your own – and it can be challenging to recognize these mistakes without a little perspective on the situation. That’s where financial professionals can help.

They can offer checkpoints, insights, and advice to help you identify the mistakes and habits that could be getting in the way of real progress. And that can empower you to make more prudent financial decisions, so you can stay on track to achieve your big-picture financial goals.





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