Bad money habits can be changed. These are not just mere words by financial experts and advisors; it can actually be done if you are patient and persevere to work towards it.
What makes change difficult for many people is the tendency to think that either you are born with a talent for managing money or you are not.
You think that once you develop bad habits, there is no coming back. This is simply not the case. There are two pieces of good news for you.
First, no one is born an over-spender. Good money habits are developed, just as you do with your bad ones.
It follows, therefore, that bad habits can be unlearned and replaced with good ones. The second piece of good news is that there are ways to change your bad money behaviour.
1. Trick yourself into getting over your impulses to buy
One problem in overcoming bad habits is that part of your brain motivates you to stop it, whereas the other part tells you to keep on doing it.
This applies to your spending habits. You tend to prioritise things that bring only temporary convenience or happiness, and so end up postponing what is for good for the long-term.
In this case, you postpone saving and investing.
How to change this habit
Financial experts say that having your money in bigger bills is better than small ones, even if they are of the same value.
The psychology behind it is that having bigger bills gives you the illusion that it is harder to earn it back than seeing the smaller bills.
You end up double thinking whether the product is worth breaking a large bill for. Most of the time, it’s not. You probably would have bought it if you had smaller bills instead.
It also helps to make it a regular practice to pay in cash rather than charge it to your card. It is easier to be aware of your spending when you actually see yourself handing out the cash you spend.
Beat your laziness to withdraw cash from the ATM. Try not bringing your credit card if you can actually pay in cash.
2. Get rid of the ‘Carpe Diem’ thinking when it comes to financial matters
Why save for later when you can make the most of it now kind of reasoning is quite common these days.
This is not a good motto when it comes to financial management, especially if you are aspiring to get rich one day.
You will be giving yourself another reason to bring out all your earnings at one splurge. Unfortunately, saving is an essential step in the path to getting richer.
How are you planning to save if you keep on spending most of your income just to make the most of life?
Today’s generation has a much more limited attention span than the past ones. That is because you have so many distractions with so many ads telling you to buy stuff.
Social media friends make us envious of their travelling experiences and new toys. It is not surprising to find it more difficult to think long-term and look at the bigger picture, and remember your big life goals.
How to change this habit
Take advantage of the conveniences that technology offers. Make the most of your smartphone by using it as a tool for budgeting.
Countless apps on budgeting and financial management are available so track your spending by making it a habit of listing everything you spend on.
At the end of the day, check your spending. You might doubt how effective this step is, but wait and see until you try it.
If you are really having problems when it comes to saving, you can opt to automate your monthly deposits into your savings.
This way, whether you remember or not, part of your income automatically goes to your savings account.
Some banks offer savings accounts from which you can only withdraw for a few times a year. With such a restriction, it will be quite difficult to touch your savings for things that are not really needed.
This article first appeared in The New Savvy.
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