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Breaking bad money habits

bad money habits
Admit it. You've got bad money habits. We all do. My own worst money habits, although catered for in my budget are:

  • drinking lattes at cafes;
  • having occasional "what the hell" moments and buying goods and services I really don't need; and
  • putting off to tomorrow what I should do today.

There isn't a money habit that can't be overcome with some good strategies. Starting today.

Breaking bad money habits isn't that different (although it should be easier) from going on a diet or quitting smoking. Money habits are easier because nicotine is an addictive drug and when it comes to dieting human beings are programmed to overeat to build up fat to tide us over the lean months.

It's ironic that we do almost the opposite with money — spending with gay abandon in the good times and struggling on nothing in the bad times.

Ten tips for breaking bad money habits

1. Habits can't usually be dumped instantly. As Mark Twain once wrote, "Habit is habit and not to be flung out the window … but coaxed downstairs a step at a time."

2. Become aware of your habits. If you want to change a habit you need to know why you do it, what the triggers are, and how the behaviour makes you feel emotionally. That might help you understand that you shop as an emotional crutch, or put off decisions because you feel inadequate. Keep a diary of your behaviour and thoughts.

3. Create new habits. If your spending problem is exacerbated by your weekly meet up and shopping trip with the girls or drinks out with the boys, either quit the regular encounter or leave the credit card behind and let your friends know you're there for the company only. You could even enlist your mates as buddies to keep you honest.

4. Write down your goals or new behaviour. Goals don't become real until you write them down. Pin them to the back of your toilet door, or use them as a screensaver on your computer at work.

5. Encourage good behaviour. Don't criticise yourself. It's better to reward yourself for your new behavioural patterns.

6. Take 30 days. Good habits take at least 30 days or 30 repeats to build.

7. Use technology. Set yourself up diary reminders of your good behaviour using whatever technology you have, be it an Outlook diary, or phone reminder. If you need you budget reinforced, use budgeting software or smartphone applications. You really can track your spending on the run with an iPhone or similar. Or, you can compare prices on the spot and haggle for a better deal.

8. Learn mantras. Write yourself some little one-line mantras to repeat to yourself when either you go to repeat the old behaviour, or you find yourself doing the new. It might be, "Do I really need it?" when you go to spend money frivolously. Or, "The new me checks my budget before spending." By repeating these you're stopping the bad in its tracks and reinforce the good behaviour.

9. Accept lapses. Only Superman or Superwoman breaks bad habits without the occasional lapse. You can either accept that you're not perfect. No-one is. Even better, you can build a little of the old you into your budget. Allow for one latte per week in a cafe, rather than trying to cut them all out.

10. List your good money habits. It's too easy to focus on the bad. What are your best money habits? One of mine is having an inbuilt automatic ability to live within my means. I even saved money when I was a student.

Finally, please take the time to share your stories here. What were your worst money habits and how did you (or are you) breaking them?

Related links
Tips for the budget-phobic
Peer pressure to spend: just say 'no'
A man is not a financial plan
Champagne lifestyle on a beer budget
Spring-clean your money for October changes
User comments
I like to go shopping with no eftpos card. if i see something i like i leave it. I count 3 times i see if. If i still want it when i see it, then i save for it. Its pretty simple cus if you forget its there, next time chances are, its in the 'last of stock' rack and is much cheaper
Kristy, you're a shining example of what people should do. Too many fritter their money then don't have anything left to pay the bills. Well done. Kind regards Diana Clement
I worked out how much all my bills cost me over a year, divided it by 52, and now I put that much into a separate online account each week. Now whenever a bill arrives, I can just take the money out of the bills account and pay it without having to worry. It is really handy for when the big ones arrive such as insurance or car registration. In regards to spending, I find it is all too easy just to swipe a card and forget about it, only to look at the bank statement later and cringe. I now take out what I am allowed to spend each week in cash. Being able to see how much you have spent and how much you have left makes you think twice before you buy. It also makes me want to spend less because any cash I have left at the end of one week gets carried over to the next week and then I have more to potentially spend that week.
Thanks travelstar. Good comments. It's lifestyle creep. We all suffer it to a certain degree. Our income increases and so does our spending. Re smartphone. I got a "free" Android handset through Vodafone and went onto a package that was actually costing me less than before. I'm stuck on the same package for two years, but am spending less overall. So I'm happy. Everyone is different, however. Some people don't want pre-pay. But it's certainly worth doing all the numbers. I'm saving money. Regards Diana Clement
As a double income household we can pretty much have what we like now, but it wasn't always like that. How quickly we adapted to having more income, and how wasteful it has made me. This year I have made a particular effort to plan our holiday travel to fit in with our best pay months (the ones when we have three paydays in a month instead of just 2) so that when we travel it is with real money so that the credit cards don't take hammering while we are away. We usually stay in self catering accommodation and only eat out occassionally. I like your idea of having an app to help monitor spending, but you need a smartphone for that. I thought I would break some of my worst spending habits and save up for a smartphone and then use an app to help maintain the change...a small goal to help achieve a big one!
For the last three years Ive been studying through a bachelor of nursing, I finally have just 2 weeks to go. I have three primary school aged kids who have put up with a lot over those three years, including us being pretty broke. Tonight we started our savings jar. We've decided we're going to go to the zoo. We've pooled all our change into the clear jar and it has place of pride in the kitchen for all to see. The kids have already decided on things they're going to go without, just so they can put their money in the jar.
Once in a while, when I happen to have a bit of extra cash on me, instead of indulging on more items that I don't need, I'll put it away, not in the bank, but hiding it in random pockets in jackets or handbags i would rarely use $20, $50. Then a few months later after you've forgotten about it, you'll find yourself a little surprise, it feels even better when you happen to find it on those rainy days where you are short of cash. It kind of feels like a little treat.
I make sure I have a little treat for myself once a month, it may be a massage or a facial or having a pedicure. It gives me something to look forward to and helps me to remain focused on my savings.
I try to save for things like Clothes, WOF, Car maintenance etc. I keep an accurate record of how much i have in each compartment eg $40 for clothes etc keeping them seperate in plastic bags.interesting post. john
Hi there, That's called envelope or bucket budgeting. It's a time-worn excellent way of budgeting. Well done. I make sure that I don't "lend" my children money even if they have it at home in their piggy banks. I like to teach them that waiting is a virtue. They have to return to the shop in question with their own money before they can buy something. They're beginning to understand that the urge does go away.

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