Avoid shopping with a spendthrift friend if it influences you to overspend
Everyone loves to have new things, but financing your habits can become difficult and a source of stress if you aren’t careful about what you buy.
Here are a few tips to help you break bad spending habits:
Identify spending downfalls
The first place to start in order to change bad habits is figuring out where your financial downfalls lie. This will require you to determine how much money you make every month. If you have several sources, be sure to add up all your income into one monthly estimate. Once you have this figure, take a look at your spending over the past month and review how quickly your money disappeared. Look for purchases that were unnecessary or impulse buys, and recognize that you can save money by avoiding these types of transactions.
Make a commitment
To get rid of your bad spending habits, try making a commitment on paper. Making a budget is the best way to stay on top of your finances. You can use a budget software program or just use a piece of paper to write down your expenses. Before allocating any of your income to an expense, consider if it is something that you absolutely need to spend money on or if it is an area where you can cut back a bit. Laying out your expenses and how much you hope to spend will provide you with a spending plan to stick to.
Curb shopping habits
When you’re trying to reduce your spending, a great place to start making changes is looking at the way you shop. If you ever find yourself at the mall with a spendthrift friend who doesn’t seem to have a budget, you should be wary about shopping with this person as it might influence you to spend more. If you notice that some people have something new every week, before feeling envious, take a moment to reflect about what that kind of habit would do to your finances. The “keeping up with Joneses” mentality can run your spending plan right into the ground. Only shop when you need to and without friends that make it hard for you to keep to your financial goals. And don’t forget — there are many ways to have fun without spending money!
Make a swap
Tackling major financial goals can be tough to do overnight, but you can start by making small changes or swaps every day. If you buy coffee every morning or a few times per week, start brewing your own at home. You could save hundreds of dollars over the course of a year just by cutting out this one habit. Additionally, you should think about how much you spend going out to eat with friends. Instead of dining out at a restaurant, you could make and enjoy a meal together at home for much less. If you must go out to eat, go for lunch instead of dinner, when the menu is a usually significantly cheaper. Making these little changes in your daily life will help you on the path to successful money management.
Roll with the punches
If you make a mistake, don’t beat yourself up over it. As mentioned earlier, it takes time to fully adopt new habits. If you spent too much and are feeling buyer’s remorse, just take a look at your remaining funds and look for any wiggle room to adjust for this purchase. You may need to make adjustments to your spending goals over time, but taking it one step at a time and staying positive is the right attitude for success!
The information contained in this article does not constitute financial, legal or tax advice and its authors make no claims about its accuracy or completeness. The authors of this article do not hold themselves out as providing any legal, tax, financial or other advice and do not make any recommendations or endorsements as to any investment, financial plan or any other product or services. The materials contained in this article do not constitute advice and you should not rely on any material in this article to make, or refrain from making, any decision. As laws and regulations change frequently, we cannot guarantee that the information contained in this article is current or applicable to your specific circumstances. Laws and regulations may vary from jurisdiction to jurisdiction. Legal, tax and financial advice must always be tailored to your specific circumstances and nothing in this article should be viewed as a substitute for the advice of competent legal, tax or financial advisors.