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A certified financial planner weighs in on bad habits

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We all have bad habits when it comes to our finances. Personal finance expert Lauren Lyons Cole says that while these habits may seem harmless, they can really impact your financial health in the long run.

On impulse purchases:

I saw a study recently that said we spend about $115,000 over the course of our lifetime on impulse purchases. So that’s a lot of money. Just think about the number of vacations you could take or the nicer house you could have bought if you just left some of those little, small things on the shelf at Target and didn’t take them home with you. So you know it really does add up.

On leveraging your first salary:

If you can negotiate an extra $5,000 in your first salary … that adds up to $500,000 in extra income over the course of your lifetime. You could make all the impulse purchases you want if you just negotiate this one $5,000 raise.

On why we make poor financial choices:

I think ignorance is a lot of it. Obviously we’re not learning these things in school. A lot of our families aren’t necessarily talking openly about money, which is why it’s so important for parents to shift that dynamic and talk about these sorts of things with their kids from a young age, not that they’re always going to listen, but it’s worth it to try and get these lessons into their minds. Even just small shifts can make a big difference.

On how to stop these bad habits:

It’s very hard to limit yourself … my advice would be to actually take a bigger-picture perspective. So choose some sort of large goal. It might be a trip to Italy, it might be buying a new car, it could be starting a business. [Make it] something that will motivate you intrinsically so that you can start to make those changes. So be more careful with overdraft fees for instance, or upping your savings percentage because you’re trying to work toward something exciting. Rather than limiting yourself, it’s more about reaching something that’s exciting. 

On the times that finances seem overwhelming:

We tend to think that we can always save 15 percent towards retirement, or we can always pay a little extra towards our student loans. The reality is there are times in our lives where we can’t. But these times are temporary, they’re finite, and you have to have that perspective. You have to realize right now you might just be getting by, and that’s OK. But make sure you have a longer-term perspective.

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