In 2025, Experts Recommend Breaking These Three Unhealthy Habits Related to Money.

As a result of high interest rates, persistently high prices caused by inflation, and an economically turbulent post-pandemic economy, many Americans are struggling to make ends meet. On the other hand, you can be battling not only the current economic climate but also your own poor financial habits. 

If you have bad financial habits, it will be difficult to keep to your budget, save for the future, or move ahead in other ways. Therefore, those matters must be attended to without delay. However, before you can change your poor financial habits, you must identify them. 

A person's bank account might be drained over time due to poor financial habits. But which are the most common and damaging? It is stated here by specialists. 

Mind over Money: The Psychology of Money and How to Use It Better Kindle Edition by Claudia Hammond

Carrying revolving debt on your credit card

The best way to use a credit card is to use it to earn points and pay off the balance in full before interest is added. However, the average American is carrying around $8,000 in credit card debt currently, which can be a formula for disaster at today's average rates. 

“Everything you buy is that much more expensive" Due to credit card interest rates hovering over 20%, warns budgeting expert Andrea Woroch. 

Additionally, maintaining credit card bills month to month increases your credit utilization ratio, harming your credit scores. 

"If you're in credit card debt like many Americans, I would look at each balance and their accompanying interest rate and tackle the cards with the highest interest rates first. I wouldn't recommend closing it out, especially if you've had it for quite a while and paid it on time," Says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation. 

He indicates that as the credit card balances drop down to 20% to 30% of the credit card line, your credit ratings should improve. 

You might also try shifting the balance to a card with an interest-free introductory period. 

"While creating a realistic debt repayment plan is an important step in finally paying off balances, transferring your balance to a zero-balance transfer card can give you a boost in paying down that debt faster," Woroch explains. 

She stated that zero-balance transfer cards provide up to 21 months with no interest. 

It's also crucial to assess your budget and ensure you can keep to it moving forward to avoid future debt accumulation. 

"The number one habit that Americans need to break this year is spending more than they earn and depending too heavily on their credit cards. This can lead to a mountain of debt," Says Paul Miller, managing partner and certified public accountant at Miller & Company LLP. 

Paying for monthly services you don't need

Most households pay for a range of important monthly services along with ones they don't need. 

"You could be wasting money on monthly bills in the form of unused services or better deals at competitors," Woroch explains. 

Wireless cell phone plans are another prominent way Americans overpay. A poll by WhistleOut found that the average American spends $157 per month on a phone plan from a large carrier, while smaller operators renting access to major networks charge roughly $30 per month. 

"Save by canceling unused subscriptions and switch to a lower-tiered data plan or move to an online-only wireless carrier," Woroch suggests. She also recommends utilizing an app like BillShark to help you negotiate expenses. 

Buying food you don't need

Food is the third highest household expense for Americans, according to the U.S. Bureau of Labor Statistics, and it's an area where many overspend. 

"Americans waste 40% of the food they buy each year, which is like throwing your hard-earned dollars in the trash," Woroch explains. 

She recommends checking local supermarket advertisements to see which things are on sale and making a meal plan based on the discounted ingredients. 

"Once you have your shopping list, check your pantry, fridge and freezer to make sure you don't double up — and shop with that list to avoid excessive grocery purchases," Woroch adds. 

Also, beware of expiration dates and the amount of fresh food you buy during each shopping trip. Woroch recommends choosing frozen fruit, which won't spoil as rapidly. 

"Finally, take pictures of your grocery receipts using a free rewards app like Fetch to earn points good toward free gift cards to stores that sell groceries, like Target, Walmart and Sam's Club, to offset future food purchases," Woroch adds. 

The bottom line

Tackling these three negative money habits might help you start 2025 on the right foot. By paying off high-rate credit card debt, minimizing needless subscription charges and being more aware of your grocery spending, you can free up more income to use for objectives that are advantageous to your overall financial strategy. 

Mind over Money: The Psychology of Money and How to Use It Better Kindle Edition by Claudia Hammond