5 Bad Financial Habits Americans Don’t Realize Cost Them Thousands
Written by
Emily Fowler
Edited by
Jenna Klaverweiden
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More Americans are focusing on their finances in 2025 than they have in the past 10 years, according to a recent study from Allianz Life. But while many plan to improve their financial stability, stress levels around finances are still high, with only 16% of people saying they’re less stressed than last year.
Here are five financial habits that could be contributing to those stress levels and costing thousands.
Excessive Spending on Nonessentials
An occasional treat isn’t the problem. It’s the frequent, mindless purchases that add up. The study found 30% of Americans admit to spending too much on things they don’t need. Anything from online impulse buys to yet another unused subscription can snowball.
Take that coffee habit. Say you buy a $4.75 coffee every week day. That will cost over $1,000 a year. With coffee prices increasing after having just reached an all-time high, according to Business Insider, that habit could cost even more in 2025!
Neglecting Savings
A significant 28% of Americans save nothing, while 27% save less than they could, per Allianz. Without a habit of consistent saving, even a minor financial setback can lead to debt. And with 49% worrying about their income and retirement income, a lack of savings can be added stress.
Automating transfers to a savings account ensures money is set aside before it’s spent, and even starting with small, regular deposits builds up over time.
Carrying Credit Card Debt Too Long
High-interest debt is a financial sinkhole, yet 23% of Americans aren’t paying down debt fast enough, according to the study. Interest charges quickly inflate balances, making it harder to get ahead. The average credit card interest rate as of Feb. 17 was 28.7%, according to the Forbes Advisor weekly credit card rates report.
Making monthly payments of $200 on a credit card balance of $7,500 with a 28% interest rate (APR) would take nearly eight years to clear and mean more than $10,000 in interest paid.
Concentrating on paying off high-interest debt first helps cut costs, and, once debt is cleared, paying credit card bills in full every month can save thousands in interest and fees.
Living Beyond Your Means
The study found that 21% of Americans spend more than they make, and outgoings that exceed income often leads to relying on credit, which isn’t sustainable.
Working on budgeting better and increasing income, whether through side gigs or enhancing existing career prospects, can help maintain a better balance.
Not Having an Emergency Fund
Unexpected emergencies can and do happen, like, car repairs, medical bills or job losses. It’s tough to scramble for cash in these situations, especially when 35% of Americans aren’t saving enough for an emergency fund to fall back on.
Even a small portion of each paycheck can gradually build a safety net against financial strain.
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