Bad Money Habits

Failing to budget

If you don't have a budget, it makes it harder to stave off financial disasters. A budget helps you decrease or prevent debt; it also helps you build savings in case of emergency.

In order to build a successful budget, first spend some time tracking your spending.  Understanding how much money you have coming in as well as going out is the first step to truly keeping a successful spending plan.

Spending more than you earn

Symptoms include charging necessities, carrying balances, and -- as the condition progresses -- transferring balances. This is often followed by running up balances on those credit cards again.

If you have to reach for plastic to make it through the month, that's a huge red flag.

Treat credit cards as a payment method, not found money. If you're low on funds, put the cards away.

Ignoring your credit report

Credit reports (and the scores that result from them) are commonly used to qualify you for credit cards and loans. And they're increasingly being used for non-credit situations, such as screenings for insurance policies, bank accounts and jobs. Here are a few things to check:

• Is the information about your account correct
   (balances, limits, name and address)?
• Are there accounts listed that aren't yours or that
•  you didn't open? If so, that could be an indication of identity theft, says Dosher.
• Are mistakes, such as late payments, charge-offs, collections, bankruptcies or foreclosures, removed on time (often after seven years)?
• Are you running up balances? Even if you pay off bills monthly, it's smart to keep your balances under 30% of your maximum credit.

Paying late

It's a classic chicken-or-egg scenario.

If you have no money troubles but pay your bills late, your credit score will drop. That means current creditors can raise your rates or cut your credit lines, and future creditors can offer higher rates or deny you.
So even if financial problems didn't cause your late payments, those late payments could trigger financial problems, especially when late-payment fees kick in.