4 Bad Finance Habits to Break in 2025

Happy New Year! 🎉

As we kick off 2025, let’s talk about something crucial for anyone on their personal finance journey - bad money habits.

Bad financial habits can quietly derail your goals. But the good news? Identifying and breaking them is half the battle.

Here are 5 bad finance habits you should leave behind this year:

1. Impulse Spending

Have you ever walked into a store for “just one thing” and walked out with a basket full of items? Or hit “add to basket” online because of a flash sale? Impulse purchases add up quickly and eat away at your budget.

Break it: I stick to a 48-hour rule for non-essential purchases. If I still desire it after 48 hours I’ll go through with the purchase, if not, I scrap the purchase.

This rule has probably saved me thousands of pounds over the years.

2. Ignoring Your Emergency Fund

Life happens - a sudden bill or job loss can hit when you least expect it. Without a financial cushion, you might end up relying on credit cards or even worse - dipping into funds from your investment pot.

Break it: Aim to save 3-6 months of living expenses in a high-yield savings account. I currently use a mixture of the Chip Savings Account (3.75% AER) and the Barclays Rainy Day Saver Account (5.12% AER) for my emergency fund cash.

3. Not Investing for the Future

Leaving your money in a savings account might feel safe, but it’s not growing enough to outpace inflation. Delaying investing can mean missing out on years of compounding growth.

Break it: Invest in one of the most tax-efficient ways available to those who live in the UK - through a Stocks & Shares ISA. Dollar Cost Average your money every time you receive your paycheck and reap the benefits of compound interest over the long term.

Not sure where to start? InvestEngine is my favourite investing platform out there right now. They're currently running a campaign where all new sign-ups to the platform will receive a welcome bonus of up to £100 - a no-brainer to start your investing journey if you ask me.

*not financial advice

4. Avoiding Financial Education

Financial knowledge is one of those things that you can’t continue to brush under the rug in 2025.

Without a basic understanding of personal finance, it’s easy to fall into common traps like high-interest debt, poor savings habits, or even predatory lending schemes. Worse yet, you could miss out on opportunities to grow your wealth through investing, tax planning, or side hustles.

But here’s the good news: financial literacy isn’t as overwhelming as it seems. You don’t need to become a Wall Street expert overnight. All it takes is a willingness to learn and small, consistent steps to improve your understanding.

Break it:

• Consuming personal finance knowledge: Books and Podcasts are some of the easiest ways to up your financial knowledge. I recently made a TikTok post outlining 5 of my favourite finance books - check it out here 

• Follow trusted financial educators online: Platforms like YouTube, TikTok, and Instagram are full of bite-sized content to help you learn on the go.

• Ask questions: Don’t be afraid to reach out to me or other finance creators/advisors. A single conversation can help provide clarity on complex topics.

Final Thoughts

Take a moment to assess which of these habits might be holding you back and commit to making 2025 the year you take control of your money.

Here’s to making 2025 the year of financial growth, intentional spending, and smart saving/investing!

I hope you enjoyed this read. If you have any questions, simply reply to this email.

over and out ✌️

Monty L.