Everyone wants to achieve financial freedom. Yet getting to that status and staying there requires effort. More often than not, however, people mismanage their finances. They develop habits that they believe are beneficial or are their only option, and as a result, these habits lead them down a path of destruction. If you’re trying to clean up your credit or improve your income, it becomes necessary to first identify where you’re going wrong and make corrections. Below, are some of the most common bad money habits that you should kick immediately.

Not Getting Educated

How many times have you applied for a credit card offer or a loan without truly understanding what it was you were getting? Very often, people are so anxious to make a move and get quick cash, that they fail to get educated. Failure to educate yourself prior to locking into an agreement can lead to everything from wasted money to a loss of assets.

New Habit: Before accepting any offers, review the information and make sure you understand it. If you were applying for a short-term loan online, for example, you should ask questions like, “What are installment loans?”, “How much will I be charged in interest?”, “Is this a good company to do business with?”, and “What are the repayment terms?”. This will help you to determine whether it is a good financial move before you sign up for something you’ll regret.

Living Beyond Your Means

Maxing out credit cards, taking out multiple loans, and ignoring outstanding bills may seem like the ideal thing to do when you don’t have any cash available, however, it is quite the opposite. When you start the habit of spending more money than you earn each year, this leads to a never-ending cycle of debt. Eventually, your debts increase, penalties are added, and everything you own is on the line.

New Habit: Thinking of charging that credit card? If you can’t afford to pay back what you’ve charged within the next 30 to 60 days, it’s best not to charge it. The same goes for a loan. If you can’t afford the repayment amount within your monthly budget, you should not borrow the money. If you have a limited income look for ways to increase your income instead.

Not Having an Emergency Fund

Another bad financial habit that individuals have is failing to save for the unexpected. Life is so unpredictable and you never know what could happen that could cause you to need some cash. You could get in a car accident and need money to pay the deductible, lose your job, break up with your spouse, or suffer a significant loss in your new business. Without funds set aside to tide you over, you’ll start maxing out charge cards and borrowing money which only puts you further in debt.

New Habit: Start putting money away each pay period towards your emergency savings account. While experts say you should have several months worth of income in an account, you can start small and work your way up. Whether you save $5 a week or $50, it’s more than you had and will certainly come in handy should an emergency arise.

This is only a tiny fraction of the many bad money habits that individuals develop over time. If you’re guilty of any of the above actions, it’s time to make a change. Start by reviewing the new habit suggestions and keep working on these areas until you’ve improved. Sure, it may take time and a lot of hard work, but in the end, you’ll feel a huge burden removed from your shoulders.