Bad Money Habits We All Need to Break

Bad Money Habits We All Need to Break

We all know the news. We are in a recession. Times are tough. We need to buckle up our wallets and learn new money and finance habits. But it can be hard to break the normal spending cycle.

Here is a listing of all money habits we all need to break, starting today and some tips on how to do just that.

Living without a budget.

You have heard all about budgets for years now, probably. But have you ever wrote up one for yourself?

It really isn’t that hard to do. You just gather your bills, estimate how much you need a month or week for things like food, gas, clothing, misc items and get to work. Of course, if you are self employed or have an unsteady job, this can be harder to work out than the person with the normal weekly pay check.

Learn to buy without plastic

Credit cards are bad. Well, actually it is those interest payments on those credit cards that are bad. How can we break the habit of not using them? It is simple. Leave them at home.

Yet, do remember if you can, it is nice to have an open credit card account in case of an emergency. Just don’t carry the card around with you or you may talk yourself into thinking that cool pair of spring jeans is an emergency, a fashion emergency.

Saving only at a set time

Some people will tell themselves that they will set a budget and spend only what is listed. Then whatever amount is left over is what they will save for that month. What happens? Most months nothing is left over and nothing is saved.

A cute trick some people have been using is by saving their change or even their one dollar bills (if their budget will allow) and keeping it in a jar. Weekly, they will take this amount to the bank. How do they acquire change? If a purchase is $3.12, they will give the clerk a $5.00 and put the remainder in their pocket. That night the change goes into their savings jar. The next tip is to leave the jar alone, as well as the savings account and allow the amount to grow.

Skip the ATM visit

Okay, you say but I am doing it smart. I am going to the ATM’s where I don’t have to pay a fee. Yet, are you really playing it smart? You are taking money from your savings or checking account, not allowing it grow.

Skip those trips as much as you can. You may be able to do this if you planned that budget, stick to it and no emergencies occur.

Read your credit reports

Make this a habit that you do three times a year. Go to and get your reports for free. Each credit bureau will allow you to see your report once a year for free. Every three months, check one. Three months later check another one. This way you are continually monitoring your credit and it is free.

Pay those bills on time

Those late fees can really add up.

Buy yourself a notebook and a calendar. Now write down when each bill needs to be paid. Each week check your list and mark off the ones you pay.

Of course, the little things such as: watching for sales, looking at the sales ads, never go to the grocery store hungry, clip coupons, watch for rebates and all of these types of tips can help as well. You may even learn some money saving tips from a friend or relative. Don’t be afraid to ask if you think you know someone who is financially secure, how they do it.


Finance Definitions: Market Liquidity

Finance Definitions: Market Liquidity

Market Liquidity refers to an investment’s capability to be transferred instantly to cash without diminishing its current value. Cash or money is the supreme example of a liquid asset. Determining a liquid asset is quite easy, as long as it can be exchange quickly with little or no change in value. One other factor is the presence of buyers and sellers at any given time. If the there are a large amount of buyers and trader, then an asset is considered very liquid. When this happens, the effects of the transactions will most likely have definite impact on the overall market prices.

On the other hand, an asset that cannot be exchange quickly and may have difficulty in marking its value is called an illiquid asset. A product’s liquidity can be calculated by how much it is traded by buyers and sellers, and the result of this is volume. Investments such as stocks and futures are liquid compared to other assets such as property and real estate. Speculators and investors usually cause market liquidity. They profit from the stock market by anticipating the current prices of each asset. The effect of their trading and transactions provide a continuous flow of money and capital to promote liquidity.

As we move along to the futures market, there is no definite guarantee that a market’s liquidity will occur to make up for the commodity contract at any time. Future trading is known as a very liquid trading environment. The most common factors to check for liquidity are the volume of trading and open interest.

Liquidity in banking has a broader term. In this sector, it is known as the facility to reach financial objectives without suffering any undesirable losses. Bankers who manage liquidity keep an eye on trends and cash flows to make sure that proper amount of liquidity is sustained. It is important to maintain stability on short-term assets and liabilities. Primary funding in banks is mostly sourced thru deposit accounts, while primary assets are from the loan portfolio. The main source of liquidity comes from the investment portfolio. Investment assets and securities have the ability to be liquidated to complement bank withdrawals and growing loans. By selling loans, borrowing from other financial institutions and raising capital, these factors all contribute to generate liquidity. In times of financial difficulties, the depositors can ask for their finances if the bank is incapable of generating cash without getting more money losses.

Financial institutions such as banks can usually maintain a certain level of liquidity required, and this is because the government insures bank deposits. If liquidity issues do arise, rates can be raised to ensure that it goes back to normal. Take note that banks attract more money thus providing more liquidity that influences all the movement of money in the world.

Market Liquidity is such an important factor in finance. It plays a part in transferring various stocks to their respective values, and vice versa. So, be safe all the time. Invest in investment assets with fast liquidity.