If you’re looking to get ahead, small changes to your spending habits can have a big impact. Reach your financial goals by using these 7 tips to crush “bad money habits.”
- Form a financial support team
When you’re trying to change a bad habit, support from friends and family can be invaluable. Just like you might tell your spouse about a diet so they won’t tempt you with cookies, tell them about your desire to budget or save. They can help you avoid impulse spending.
- Start with the small stuff
It’s not realistic to think you’ll change all your bad money habits at once. The pressure of trying to follow an all-new budget can be too much, leading some people to fall off the wagon. Start with one change — say, save money on food when traveling or at home — then when you’ve integrated that successfully, make another change.
- Unsubscribe from everything
Are you paying for cable and a fancy phone plan? Do you enjoy multiple magazine subscriptions or streaming media services, or have a gym membership you use now and then? Realize an instant boost to your bottom line by unsubscribing from these services.
4.Try living cash-only
When everything goes on the card or you’ve made a habit of taking out personal instalment loans, it’s easy to overlook the true cost of everyday items like groceries or clothes. When you live cash-only — and have to manage your bills conservatively by counting out every purchase — the numbers take on a greater meaning. If you feel like you can’t get a handle on where your money goes, this habit will help you become hyper-aware of spending trends, so you can implement positive changes.
- Start to notice what triggers you and make different choices
Often, there’s a trigger to those bad money habits you’re not aware of. Maybe you let the same friend talk you into eating at expensive restaurants, even though you regret overspending later. Once you notice what triggers you, you can put distance between the trigger and the impulse to make a bad financial decision, eventually changing your behaviour. To combat overspending on fancy meals, you might text your friend with cheaper picks ahead of time or dine together less frequently, but guilt free.
- See the glass half full, not half empty
Rather than adopt a mind-set of deprivation and focus on all the things you’re going without, try to think positively about the things you can enjoy. For instance, rather than focus on the dance class or girls’ night out you can’t afford at the moment, appreciate the beauty in the (free) hike you took or the potluck you enjoyed with friends. When you’re celebrating the decisions you are making, you’ll enjoy a positive outlook.
- Celebrate progress toward your goal
If you’re paying down credit card debt or saving money for a rainy day, progress might feel abstract. By taking steps to make your progress concrete, you can stay fired up to save and avoid the temptation to spend. Track progress in a spread sheet, or create a symbolic ritual around saving. Maybe you place a marble in a jar every time you pay off $100 in credit card debt, for example. As the jar fills with marbles, your progress toward the debt-free life you long for is made manifest, and you have a tangible reminder of your success, inspiring you to stick with it.
Once you’ve reached a goal — say, saving $5,000 in a fund that can be used instead of emergency cash loans — don’t revert to those bad habits. Set your sights higher, then keep following your new money habits to fund another goal.