Break these deadly money habits

If your money situation is a mess or, worse, you don’t know your money situation, here are some bad habits to break and some baby steps to get started.

Head in the sand. Do you know where your finances stand? You don’t have to be a financial wizard, make charts and graphs, or read the Wall Street Journal every morning. But you do need to know your balances. If you have been ignoring your finances, bite the bullet and take a look. Then check your bank accounts every single day. Whether you look online or call the automated bank teller, you need to know. Not only can you lose track, but if your accounts are compromised, fast action will be the key to recovery.

Spending without tracking. Here’s where writing things down will come in handy. Once again, behavior improves when it is recorded. If your dad told you, “take care of the pennies and the dollars will take care of themselves,” this is what he meant. At least for a month or so, track every cent you spend and you may be shocked. If you don’t want to carry a notebook and write down your expenses, at least save every receipt and list the expenses the next morning over coffee. The amounts you spend will likely surprise you, and keeping track will cause you to spend more carefully.

Paying only the minimum due on credit cards. Paying only the minimum will mean it takes years to pay off a simple bill. If the best you can do this month is to pay a couple of extra dollars, do it. But commit (in writing to yourself) to add a bit more over the minimum each month.

Hint: If you can rearrange your finances to do so, make a habit of paying your credit card bill two weeks or more before the due date. That will slow down the rate at which interest accrues, plus it will make it less likely you will forget and miss a due date.