Bad Money Habits You Want To Change
Do you have any spending habits?
We all have spending habits. Every time we put our hands on the purse or the wallet – that’s us falling for a spending habit.
The question you really need to ask yourself is:
Do my spending habits help me be better, or they work against me? (Well, it’s basically You working against You)
Good Spending Habits Vs. Bad Spending Habits
Good spending habits are money habits related to improving your state of life without having to go into debt.
It also means that you don’t touch your savings (yes, you should have savings if your habits are good) and none of the purchases you make hurts your financial stability.
Now, bad spending habits are the exact opposite of the good ones. These money habits actually do you little good, and the happiness of every purchase is a-few-minutes-long until you realise that you overspent/forgot to pay something else/took from your savings, etc.
But let’s take a closer look at 7 signs your spending habits are bad.
Later, we will even talk about the 3-step formula to fight them and change them into good habits.
1. Going Out To Shop Without a Clear Idea of What You’ll Buy
Even if you have a grocery shopping list, a grocery price list and a grocery budget… you don’t spend money only on groceries, right?
Actually, your grocery spendings could follow every single rule from the books and yet, that’s the only thing you do correctly.
What about everything else?
Clothes? Shoes? Craft Supplies? Tech? Furniture? What about the little things you got when no one’s watching?
Going out on a random shopping without the clear idea of what you actually want to get is a bad spending habit.
2. Setting Up An Amount Of Money To Spend And Not Sticking To It
Ok, you’ve got the list, you are out on a hunt for the items. You see them. You get them…
And then you see something else. You get that too…
And then another thing or two mysteriously appear in your shopping basket…
You got the point, right?
That’s a bad spending habit.
What’s the point of coming up with an amount of money you want to spend and then spend twice more?
What to do instead?
Solution: When you see an item, you believe you need, write it down on the back of your shopping list and decide if you really need it when you get home. Most likely, 24 hours later, you will conclude that it’s a thing you could live without.
3. Not Having a Certain Amount To Spend At All!
Spending over the budget you set up is bad. Not having a spending budget is even worse.
It makes you feel like the sky is the limit, and when it comes to putting an end on irrational spending – that’s not something you’d want to stick to.
Always have a spending budget when going out. Even better: withdraw the amount you originally wanted to spend and leave your debit and credit cards at home. Attack the bad habit before it eats you down.
4. Not Planning You Spendings Ahead
Now, that’s something different than the previous one. Very different and vital to your financial future.
Money Rule: Planning ahead is the main game you play when working with money.
What does planning ahead mean?
It means that you know the following few things:
- Every big amount of money you will need for the next 5 or 10 years – this includes down payment for a house, paying for college for your children, up-coming weddings, any investments you plan on doing.
- Every big event that will cost you money for the next 12 months. – holidays, school supplies, buying a new car, renovating your house, etc.
- Birthdays, parties and events in the next 6 months. – yes, your husband’s birthday is 5 months from now, but unless you plan on gifting him with a bowtie, then you need some money aside (even if that’s £50)
- Up-coming payments for the following month – at the beginning of every month sit down for 10 minutes and have a look at what’s coming the next month (not the current one). If while you read this is the beginning of September, sit down and see what’s coming up in October. In this way, you will be able to make better spending decisions in September.
5. Spending It All
Living paycheck to paycheck is something absolutely horrible, and if you’re in this situation, I am really sorry.
But you are in control of the present, and that includes everything you have in your account.
Spending it all every month will only increase your stress levels and anxiety. Nothing could change unless you decide to change it.
And there’s always an option to make things better: revise your spending habits and start working smart with your money.
Alternatively, you could even look for another job with a better payment – obviously, there’s nothing to hold you on the current position.
6. Subscribing to Anything and Everything
I believe this is a new disease nowadays.
Netflix is cheap, only £10 a month. Gaia is cheap, only £9 a month. Amazin Prime is cheap – only £15 or so a month. Kindle is cheap… You get the point.
The subscriptions I listed above are actually my subscriptions. I can clearly see how my money goes away every month on very cheap monthly subscriptions.
That’s not a good spending habit if you struggle with money.
Review your monthly subscription and see if you really use the maximum of what you pay for.
For example, I don’t watch too much Netflix, but my partner does. He doesn’t even care what Gaia is, but I spend 2 hours weekly watching videos on it. For us, they work. Amazon Prime isn’t something that’s worth to pay for right now, so if we need to get something, we pay for delivery.
Do your math now.
7. Choosing the Offers
Sometimes I feel like there’s an invisible rope that pulls me towards shops that have big red signs that say Offer or %Discount.
And that’s a bad habit.
In fact, you and I know that what it used to be Discounts and Offers five years ago has nothing to do with the Offers they… offer now. £3-5 of discount is not worth it if you still pay £30.
Many shops increase the prices of their items for a month before the Offer kicks in so that they could sell their goods at a relatively high price.
Be aware of this bad spending habit – you might be its victim and don’t even know it.
The only time I really enjoy offers is when I know that the item I want to buy was on a certain, higher price for a long period before it was discounted.
How to Break A Bad Spending Habit in 2 Simple Steps
Maybe you didn’t see your bad habit listed above? Anyway, you are aware something must be wrong as you don’t seem to be able to save anything. Follow these 3 simple steps in breaking a bad habit.
Step 1: Identify The Bad Habit
Well, it’s not a huge surprise, I admit.
However, you cannot fight ghosts, right?
Your bad habits are exactly that – ghosts that are around you and hunt you down every time you have to spend money on anything. Identify them. Name them. See the enemy and fight it.
Step 2: Create an action plan
Identifying a bad money habit and telling yourself “I promise, I won’t do that again!” is not enough.
If it were that easy, you wouldn’t read financial blogs right now but do something way more pleasant.
You want to know how you could fight that bad money habit. You need an action plan.
Write down on a piece of paper your bad habit and underneath write at least 3 ways you could fight it.
Let’s give an example. If I am going out to shop without a clear idea of what I want here are 3 action steps I could take next time.
I’m out, and I’ve just realised that I didn’t make any plans on what to buy.
- The first thing I could do is stay in the car for another 5 minutes and write down the things I want to buy.
- The second thing I could do is to “punish myself” by getting one item only. In this way, I will have to go out one more time, and I will do it with a shopping list.
- A third option: I could withdraw some cash and spend only that money – I still restricted myself from overspending as at the time of the withdraw I’ve done some simple math.
- A BONUS fourth option: If anyway, I bought a bunch of stuff I didn’t plan on getting, I could go back to the shop and simply return them. Yes, you could do that nowadays, and you know it, you just don’t like it.
Yes, there was a bonus option too. Just come up with as many as possible.
Self-punishment isn’t something other people advertise, but can you really identify not-buying-something as an unspeakable punishment? Oh, please!
Step 3: Practise. Fail. Practise some more
If you believe you will be able to identify the bad habit, create an action plan and beat it’s a*s… you are wrong.
It’s going to happen the opposite!
Changing a bad habit into a good one is hard, and I won’t be the person that’s going to cheer you up and tell you “You got it!”
Yes, you got it… but not from the first time.
Most likely won’t be the second time either.
But the more you fail and the more you come back to fight it again and again, the better it’s going to get.
Keep calm and “rinse and repeat” as many times as possible. This fight is about getting better financially and being the boss of your money. Of course, you can do it! It all depends on how long you are willing to stay on the battlefield.
Tell me what you think of these bad spending habits. Did you see yours listed? How do you fight them?