Don’t Be a Financial Dinosaur: Ten Outdated Money Habits to Ditch Today

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Think dinosaurs died out millions of years ago? Think again. Some of them are still clinging on… in our financial behaviour.

Old habits might feel comfortable, but they often belong in the past. In a world where money moves faster than ever, many people are still relying on outdated financial approaches that no longer work. Whether it’s sticking with the same bank out of blind loyalty or ignoring your pension because retirement seems far off, these habits can quietly eat away at your wealth and hold back your financial future.

Here are ten outdated money habits that need to go extinct. If you’re still doing any of these, it’s time to evolve:

 

1. Being Loyal (or Just Lazy)

In the past, customer loyalty often meant better deals and special treatment. These days, the opposite is true. Banks, insurers, broadband companies and energy providers frequently offer the best rates to new customers. Long-term customers are often quietly penalised with higher prices or reduced benefits. Many people let contracts renew automatically or stick with the same providers out of habit. But in doing so, they could be paying hundreds more each year.

Evolve your approach: Review your providers at least once a year. Shop around before your insurance, broadband or mobile contract renews. Use comparison sites to make sure you’re still getting a fair deal. If you’re not, switch. There’s rarely any benefit to staying loyal in today’s market.

 

2. Only Paying the Minimum on Your Credit Card

Credit cards can be useful, but only if used wisely. Paying just the minimum each month is a dangerous trap. It keeps you in debt for far longer than necessary and results in significant interest charges. For example, if you owe £2,000 on a card with 20% interest and only make minimum payments, it could take over 25 years to repay. You’d end up paying far more in interest than you originally borrowed.

Evolve your approach: Always aim to pay off your balance in full each month. If that’s not possible, commit to a fixed monthly payment that’s higher than the minimum. Even a small increase can dramatically reduce the repayment period and save you a fortune in interest.

 

3. Relying on Credit to Cover Essentials

If you regularly use credit cards or overdrafts to cover everyday expenses like groceries, fuel or bills, it’s a sign that something is wrong. While it might help in the short term, relying on credit to make ends meet can quickly lead to mounting debt and long-term stress.

Evolve your approach: Seek support sooner rather than later. Charities like StepChange, Citizens Advice, and National Debtline offer free, confidential help. They can guide you through options like budgeting, debt repayment plans or even negotiating with creditors. There’s no shame in asking for help. In fact, it’s one of the smartest and bravest financial decisions you can make.

 

4. Paying for Things You Don’t Use

It’s surprisingly easy to forget about subscriptions. Gym memberships, streaming platforms, magazines, software apps… The average person wastes more than £250 a year on services they don’t actually use. With everything on auto-renewal, it’s easy to let those payments go unnoticed.

Evolve your approach: Review your subscriptions every few months. Look through your bank statements and cancel anything that no longer adds value. Apps like Emma and Snoop can help track and manage your subscriptions in one place. Regular clean-ups can save you a lot over time.

 

5. Setting and Forgetting Direct Debits

Using Direct Debits to pay for things can make life easier and often come with small discounts, especially for things like council tax and energy bills. But when you set them and forget them, you can lose visibility over what you’re paying. Some Direct Debits continue long after you stop using the service. Others may creep up in price without you noticing.

Evolve your approach: Use Direct Debits for essentials, but check them twice a year. Cancel anything unnecessary and consider whether it’s worth paying larger bills like car insurance annually, as it can work out cheaper than monthly instalments.

 

6. Hoarding Cash in Low-Interest Accounts

Keeping large sums of money in a current account or stashing it under the mattress might feel secure, but it’s a poor long-term strategy. With inflation eating away at the value of money, cash that isn’t earning interest is effectively shrinking in real terms.

Evolve your approach: Put your savings to work. Move surplus cash into a high-interest savings account or a Cash ISA. Many providers are still offering relatively attractive interest rates but you will need to shop around to find the best rates. If you don’t plan on spending your money for at least five years, consider investing. While this does carry some level of risk, for most people this is the best way to grow wealth over time.

 

7. Ignoring Your Pension

Pensions often feel like a ‘later’ problem. But the truth is, the earlier you engage with your pension, the more powerful it becomes. Thanks to tax relief, employer contributions, and compounding investment returns, even small changes now can have a big impact later. Yet many people don’t know how much they’re contributing, what they’re invested in, or whether they’re on track for a comfortable retirement. Others have several forgotten pots scattered across old jobs.

Evolve your approach: Take an active interest in your pension. Log in to your accounts, check your investment strategy, and understand your fees. Consider consolidating old pots where appropriate, and if you’ve lost track of any, use the government’s free Pension Tracing Service. If you’re unsure how your pension stacks up, speak to an independent financial planner for a full review.

 

8. Failing to Budget

Many people avoid budgeting because they think it’s restrictive or complicated. In reality, a budget is simply a tool to help you make more conscious decisions about your money. Without a clear budget, it’s easy to overspend and lose track of where your money is going. This can lead to financial stress, missed opportunities to save, and difficulty reaching your goals.

Evolve your approach: Build a simple monthly budget. Start by listing your income, fixed expenses and essential costs. Then allocate amounts for discretionary spending and savings. Whether you use a spreadsheet, budgeting app or a notebook, the important thing is having a system that works for you. Regularly reviewing your spending helps you stay in control and make smarter choices.

 

9. Avoiding Money Conversations

Talking about money can feel uncomfortable, especially with partners, family or friends. But silence can create confusion, mistrust and missed opportunities. Too often, couples don’t align on spending priorities. Parents avoid talking to children about money. Adult children and ageing parents dodge difficult topics like inheritance, care needs or financial support.

Evolve your approach: Start having open, honest conversations. Talk to your partner about shared goals and responsibilities. Teach children about saving and spending. If you’re supporting parents or need to discuss future planning, do so while everyone is calm and capable. Financial clarity starts with communication.

 

10. Trying to Do Everything Alone

The world of personal finance can be complex. From pensions and investments to tax and inheritance planning, there’s a lot to navigate. Yet many people try to do it all themselves or avoid it altogether out of fear, pride or confusion. But just like you wouldn’t build a house without an architect, it rarely makes sense to plan your financial future without expert guidance.

Evolve your approach: Seek professional help when you need it. A Chartered Financial Planner can help you understand your options, make informed decisions and create a strategy that’s tailored to your goals. Whether you’re preparing for retirement, building wealth, or planning for your family’s future, expert advice can give you peace of mind and confidence.

 

Evolve Your Money Habits and Take Control

Outdated money habits might not seem urgent, but over time, they quietly chip away at your financial wellbeing. Making small, intentional changes can save you money, reduce stress, and set you up for a more secure and fulfilling future.

Don’t let your financial behaviour become a relic of the past. Whether it’s finally reviewing your pension, cancelling unused subscriptions, or having that long-overdue money conversation, now is the time to act.

At NorthStar, we specialise in helping individuals and families modernise their finances and plan with clarity and confidence. Our team of Chartered Financial Planners is here to guide you at every stage, from budgeting to retirement and beyond.

 

If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.

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