9 Bad Financial Habits and How to Easily Fix Them

Bad financial habits are hard to break. Would it motivate you if we told you they can eventually spoil your long-term financial goals? It’s not just about impulse spending and overspending.

Some loans, for example, can impact your chances of getting a mortgage. In some cases, this can be positive, as responsibly borrowing and paying loans back on time demonstrates that you’re willing to stick to the rules. However, taking out loans all the time will have a negative impact on your credit score. This could ruin your chances of getting a house loan in the future.

Bad money habits can crush your financial dreams, and if you’re currently engaging in any of these habits, you need to break them fast! Here are the 9 bad financial habits that you need to break right now. We’ve also included helpful tips on how to mend your ways.

1. You Buy on Impulse

Don’t let your heart rule your head. Sure, that new top might be nice, and going to the pub spontaneously with your mates on a Wednesday is always tempting. But do you really need to spend that money? Obviously, everybody deserves a treat from time to time. But when your spending gets out of control, things become dangerous. If you’re always out and always spending, you’ll likely run up debts. These will eat into your savings and eventually into your wages. Keep a level head. Don’t spend more than you earn, and always try to end the month with a little left over. It helps to use cash, instead of paying with cards.

2. You Don’t Save Any Money

We know that on payday, we all tend to spend a little more than we should. As bad financial habits go, this is entirely forgivable – we’re all human. However, if you’re not putting any money aside in a savings account, you may find this to be a problem later on. One survey says that Australians are putting over $400 into a savings account each month. How do you measure up to that? The best way to be an effective saver is to set up an automatic, standing order to move a portion of your income straight into a savings account on payday. Since you’ll never ‘see’ the money in your account, you won’t miss it. If you get a pay raise, increase your standing order to move some extra money. This is an effective strategy, as it’s much easier to keep on saving when it’s being done automatically for you. But also consider moving any ‘extra’ money at the end of each month into your savings too.

3. You Aren’t Fixing Your Debt Problems

If you have debt demons, you need to beat them before you can start to make real progress towards your financial dreams. Debt can ruin your credit score and spoil your chance of getting a mortgage. Think about consolidating your debt using a new loan, so that it’s all in one place and all at one rate. Then, create a payment plan to pay off the debt and save money on your normal spending. It takes time and dedication, but you’ll get there in the end.

4. You Use Your Credit Card Too Much

This ties into what we’re saying above. Using a credit card can help you to be flexible with your financing. But bad financial habits can arise when you use these cards too much. If you’re paying for everything on credit, you’re creating a much larger problem for yourself down the road. If you have multiple cards, think about cancelling several so that you can keep an eye on what’s going on. Don’t try to justify it with the fact you’re collecting rewards points either. These rewards mean nothing compared to the potential costs of long-term debt.

5. You Don’t Have a Budget

How can you keep an eye on whether or not your finances are doing well when you haven’t set up a budget? It doesn’t take long to put together your monthly income and outgoings, and to see if there’s a shortfall. Make sure to take everything into account, from food and utilities to nights out and weekend trips. This can help you identify and prevent future frivolous spending, which in turn will help you work towards your savings goals.

6. Ignoring Your Bills

Everybody hates opening bills. But ignoring them can cause real problems. Ignoring a bill is often a symptom of knowing that the money the letter is asking for will be high. This could mean that you’re spending too much on your phone, for example. If you know that deep down, you’re spending too much on this type of thing, that’s a longer term issue to tackle.

In the short term – open it, and pay it. Letting bills stack up makes them much harder to pay off than dealing with them bit by bit.

7. You Throw Away too Much

Do you ever find yourself throwing things away that you haven’t even used? Food is a good example of this. It’s not uncommon that we’ll throw away old potatoes, fruits and vegetables. This is often because we simply bought too much in the first place. You don’t always have to take advantage of good deals if you’re not going to eat the things you’re buying. Having said that, many people throw away food that could be frozen for later. Think about what you’re throwing away and whether there’s a way of preserving it, before you chuck it in the bin.

8. You’re Comparing Yourself to Others

We all get jealous of the things other people have from time to time. But just because your friend got a brand new fishing rod, doesn’t mean you need one, too. Ask yourself if you really need these things yourself or whether it’s just the green monster speaking. Chances are, it’s the latter — and you can easily live without it.

9. Not Getting a Handle on Credit Cards

While some people do not have trouble tackling their credit card debt, others may find it hard. Spending out-of-control on your credit card can lead to some huge problems, such as running up high interest, damaging your credit score, or taking money away from your retirement savings.

But you’ve got different options to turn it around if you are not getting a handle on your credit card. Here are ways to do it:

  • Pay more than the monthly minimum. Avoid a heap of interest charges by paying your monthly balance in full whenever possible. Pay more than the monthly minimum to help you save money on interest and get rid of your debt faster.
  • Limit spending on your credit card. Establish a strict limit on how much you can charge on your credit cards per month.
  • Leave your credit card at home. It might be extreme but taking your credit card out of your wallet and leaving it at home is a sure way to stop using it.
  • Remove your credit card information. Deleting your payment information from your browser’s autofill feature will force you to manually enter in your credit card data and billing address every time you do online shopping. This can discourage you to continue purchasing online and decrease your impulsive spending.

Solving Your Bad Financial Habits

Preventing yourself from falling into bad financial habits can be hard. But once you’re living with these habits, it’s even harder to get out of them. It’s not an easy task, but everybody is capable of budgeting and spending their money a little better. So good luck with your bad habit-free financial future!

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice – Moneysmart.gov.au.

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat