6 Bad Money Spending Habits That Will Break Your Retirement Plan 

According to Darren Hardy, the author of Compound Effect, 'a few habits repeated over time can affect our future life outcomes more than any other variable.' When it comes to bad spending habits, the compound effects can affect your retirement savings plan. 

When you look into some spending habits statistics, the findings among the majority of Americans might surprise you. Instead of waiting until the time is late, the right thing done at the right time might put you on the path to a better financial future. 

Curious how bad spending habits can affect your retirement plan? Check out the following examples below.

Limited Ability To Save For Retirement 

Overspending in any form will limit your ability to save for retirement. There are no two ways about it. It doesn't matter whether the cause of overspending is justifiable or not. 

You Could Be Struggling Behind Your Savings Goal 

Probably you have some retirement savings goals set in front of you. Unfortunately, if you are not saving enough as often as required, you'll continue to struggle behind your retirement savings goal. 

That means the life you dream to experience after retirement will continue to be a mirage. 

The Perpetual Debt Trap 

That's probably the worst thing about bad spending habits. You are constantly trapped in a cycle of debt repayment. Perhaps, when you are slightly late with your repayment plans, you'll end up paying high interest and penalties. 

Assuming you are trapped in big debt, you won't be in a good position to save for retirement. 

How To Stop Bad Spending Habits?

The first and foremost way to stop your bad spending habits is to be able to acknowledge what is causing them and where they are coming from. If you are unaware of where your money is going it will be very difficult to correct this. Bellow there 6 common bad spending habits to look out for that could help you stop your bad spending habits before it becomes detrimental to your retirement.

Bad Spending Habits To Watch For If You Want To Retire Well 

#1: Shopping Without List

Having a clear intention and no intention are two different things. Interestingly, our brains are prone to subtle, automatic, and subconscious influences, especially in a shopping environment. Inside an online or offline shopping environment, you are prone to buying things you never intended. That's why you should avoid shopping without a list of the important things you want to buy. 

#2: Repetitive Impulsive Buying 

One or two impulsive purchases might not be a problem. However, mindless repetition of impulsive purchases over a long period will never work well for your retirement savings plan. 

Regardless of the context, if you have a strong habit of impulsive purchases, you might feel comfortable about spending from your retirement savings plan. Unfortunately, this habit alone can deplete your retirement savings. 

#3: Conforming To Social Pressure 

Some people refer to this as keeping up with the Joneses. Even when your friends and colleagues are not persuading you directly, the way you perceive what they do might result in the form of social pressure. 

When you feel that pressure to keep up, you'll be tempted to conform by spending money the way they do; even when you cannot afford to do so. 

This could manifest in behaviors like moving to an expensive neighborhood or buying a bigger home, sometimes in debt. 

#4: Paying For Subscriptions You Don't Use 

The tricky part about this spending habit is that it's always hard to notice the full effect. Now pause for a while, and remember what Darren Hardy said about the compound effect of a habit repeated over a long period. One way to look at it is this. The money spent on subscription services you don't use could be redirected into your retirement savings plan. 

#5: Spending More Than You Make 

Because of easy access to credit, you might feel entitled to spend more than you make. For example, if you are making $3000 per month, you may have access to $2000 credit or more at a particular point in time. 

Unfortunately, when you live in a cycle of spending more than you make in each passing month, your ability to save for retirement will be limited. The other tricky part about it is that any late payment of your debt will attract interest and penalties. 

Consequently, the more debt and interests you pay as a result of spending more than you make will always work against you. 

Spending more than you make and living below your means is a numbers game. Go relearn your finance math and see where adjustments can be made without degrading your standard of living. 

#6: Spending Your Future Income 

It doesn't matter how much percentage of it you spend today, spending your future income is never a good financial habit. While you are still working and actively earning income, the perpetuation of this bad habit is likely to keep you trapped for a long time into the future. 

What happens is that when you spend your unearned future income, it will limit the amount you can save for retirement. 

Consequently, when the amount you can save for retirement is already spent, there won't be enough resources to implement your retirement plans. 

Without sufficient resources, the benefits of retirement investment planning will continue to elude you, especially at old age.