Avoiding costly trends when managing your personal finances is key to creating personal wealth, savings, and having money for investments like interest bearing savings accounts and CDs. As you may know, in the world of personal finance, there are many trends both positive and negative, and not all trends will fit your specific goals and lifestyle needs. So, below, we’ll dive into three trends that could derail your ability to grow your personal wealth.

Trend #1: Relying on credit cards when you need extra money.

Many Americans today don’t have enough savings to cover a $1,000 financial hiccup in their daily lives. These types of expenses could be a kitchen appliance, an unforeseen car repair, or even a medical bill. Many Americans use credit cards to pay for these types of expenses, which increases the cost of the expense (through interest) and adds debt to their financial lives. Consider reducing your budget, transportation costs, restaurant dining, or other expenses in order to save up a minimum of $1,000 dollars to use to cover these types of expenses. Any time you fall below your minimum, slim your budget to replenish your savings account and rebuild your safety net.

Trend #2: Not having a budget.

Not having a budget means you’re apt to live at (or even beyond) your means, leaving very little for savings or investments. A budget is another word for financial plan. If you sit down and plan your expenses, your activities, and your sources of income, it will give you a clear picture of what you can and cannot afford to do. The first line in your budget should always be savings. For example, start with saving 5% of your income, and increase that over time to 10%, and then 15% until you reach your goals. Set limits on spending outside of necessities and scrutinize recurring bills like expensive cable packages or expensive habits like buying coffee every morning. You can have fun with budgeting too! Set a savings goal like spending no money on Tuesdays! Can you do it? The money you save can be put to work for you.

Trend 3: Buying more car than you need.

Many of us want to buy luxury cars or SUVs to transport us all around. But we often forget that the monthly payment is not the full cost of owning an expensive car. Registration and taxes are often more expensive with higher value cars, as are repairs, insurance, and gasoline costs. These expenses add up quickly and should always be factored into research. Instead of focusing on that expensive luxury car, search for a car that is more reasonable for your budget. The right combination of comfort, affordability, and utility will help put you on the path towards financial success.

Break away from these trends and start saving for the future you deserve!