How to Change Bad Spending Habits
Spending wisely and putting a stop to wasting money can help deliver you safely on the other side of hard times.
|
|
Reckless spending during a recession, whether on a personal, business or governmental level, can only perpetuate or deepen financial problems.
Learning to discern and separate necessary from unnecessary spending, is the first step to economic recovery. Reversing bad spending habits involves adopting a saner and more thoughtful set of spending principals. This can then translate into financial stability- even in times of recession. |
|
Recognizing Bad Spending Habits
To fix your spending habits, you need to recognize them first. What do you spend your money on? Most people don’t even know for sure. It just goes. Our spending habits however, reveal much about us. Periodically reflecting on how we use our resources can help us stop wasting money and begin to fix bad spending habits. Calculating your spending is as easy as 1-2-3:
1. Keep a Record
Start by writing down every time you spend money you don’t need to, or spend more than you need to on a single item.
2. Do this for One Week
At the end of the week, look at your list. If you have been honest, there will likely be a dozen or more items that could have been eliminated, or that you could have gotten cheaper.
3. Add up the Cost
Chances are, the total cost of these items is substantial. Multiply the amount for that week times 52 weeks. This is what you probably waste in one year.
|
| |
|
|
Determine the Cause of Your Bad Spending
Look at each item. Why did you buy that? Were you in a hurry? Were you too hungry or tired to make a good decision? Did you get caught up in the moment?
Perhaps it was a matter of impulse or not taking a few seconds to discern real need from momentary want. You probably experienced each of these “weak” moments during the week, as we all do. The trick here is to experience the tiredness, the impulse, the momentary excitement, and then pass by the item.
Some other causes for bad spending habits are:
- Lack of training or education in financial matters.
- Never having “enough” money to plan with.
- Failure to budget.
- Lack of discipline, even if you have a budget.
- Irregular or unpredictable income.
Whatever the causative factors, bad spending habits drain resources and prevent you from making the most out of the money that is available to you every month. |
| |
|
|
Breaking Those Habits by Making New Choices
Look again at the items on your list. Each expenditure was a choice. New habits can only be formed one choice at a time, so you will need to alter your bad spending behavior by considering each purchase no matter how small.
Here’s an example: A medium coffee at the drive-thru each morning costs $1.49. You add a donut for $1.29. Your daily drive-thru total is $2.78. Okay, so 5 days a week for 50 weeks per year is 250 x $2.78, which equals $685. Could you have your coffee at home? Does your waistline really need the donut? Rethinking some of your habitual spending patterns can yield hundreds, and probably thousands of dollars a year. |
| |
|
|
Getting Clear on Your Financial Goals
Do you have a clear set of financial goals? Those who do, usually have more to show for their work efforts at the end of the day, as well as at retirement. If you haven’t given this much thought until now, you are not alone. Most people fail to plan, and as they say, “Failure to plan is planning to fail.”
Ask yourself what you want to accomplish on a weekly, monthly, and yearly basis. If your goal is to purchase a new home by next year, what are you doing today and this week to make that happen? Perhaps your goal is to lessen your credit card debt or eliminate it altogether. What changes can you make? and what do you need to do to meet your goal?
Spend some time thinking about what you want to accomplish with your money over the next 5 to 10 years. Write it down. |
| |
|
|
Make a Workable Plan
To effectively change your spending behavior, you will needt a plan of action. All workable plans need:
- Well-defined, specific goals, both short term and long-term.
- A timetable with specific dates.
- A way to measure success using specific measurements or milestones.
- Allowance for unexpected events and room for revision.
Creating a workable plan for reversing bad spending habits means setting goals, prioritizing them, and creating and instituting a specific plan of action.
Perhaps beginning to save a set amount each week, no matter what, could be a starting place. Eliminating some of the unnecessary expenditures identified above, could even free up enough money to invest! If you plan on helping finance your child’s education, you might want to create a long-term goal supported by shorter term goals.
If you need help creating a workable plan, it might be worth hiring a financial planner. You could go through the Financial Planning Association,or search through the many other helpful sites on the internet. Just be careful, as there are fraudulent “advisors” waiting to take advantage of those seeking to make or invest money online. |
| |
|
|
Check Your Progress
Take time each month to check on your own progress. Keep your financial materials in one location and well organized. As you check off some of the goals you’ve met, or milestones you’ve achieved, you’re going to feel good about having a handle on your financial affairs. You’ll be better able to deal with set-backs as they occur, and you may even be able to reach out to someone else who needs a hand from time to time. |
|
|
| |
|
|
Get Some Advice
Even the longest journey begins with a single step. Looking at present spending habits should reveal where you need to start. If your situation has gotten way out of hand, and you feel you can’t get back on track by yourself, then get help. Most communities have non-profit organizations that will help you gain budgeting skills and create a workable financial plan. A couple of online sources you can try are, The ConsumerCreditCounselingService, and GreenPath. You may also want to read “What to do When You Can’t Pay the Bills,” and “Steps to Maintaining a Positive Attitude,” both available at this site. |
| |
|
| |
|
| |
|
|
Share
Comment
Print Article