How To Stop Bad Spending Habits
Do you have bad spending habits? Do you find yourself spending more than you earn, digging yourself more into debt? Do you frequently make impulse purchases? Are you confused about where all your money went at the end of the month? Watch the video courtesy of Cambridge Credit to determine what type of spender you are.
If any of these are true, don’t panic. You are only one of many victims of impulse purchasing. Unfortunately, just because our government adopted bad spending decisions, doesn’t mean that you can afford to as well. The good thing is, you can easily stop bad spending habits, with a little planning and determination.
First, realize that this problem is ruining your life. You are getting into more and more unsustainable debt. Sooner or later, you have to stop your bad spending habits, and pay for all the debt and develop new, better habits.
Solving your problem starts with understanding it first. How much do you spend on things you don’t need? For a month, or even a week, record all your purchases. Carry a small notebook and pen with you, and write down everything you buy. At the end of the month, evaluate your purchasing decisions. If you decided not to buy all those things, how much money would you be saving? Ask yourself:
- Were all of your purchases worth the money you spent?
- Were some of them simply impulse purchases that you regretted later?
- Could you honestly live without your purchase?
- Would you be better off financially if you didn’t make the purchase(s)?
- Could the money be put towards better uses?
If you answered yes to at least two of those questions, you need to re-evaluate the way you use your money. Considering the current state of things, if you answered yes to at least one of those questions, you’re in big trouble. Reanalyzing the way you handle your money will give you much needed insight to the problem, making it easier to stop bad spending habits.
Second, simply make a concrete plan to stop bad spending habits. Take specific and necessary actions against your detrimental bad spending decisions. If you are buying too much with credit cards because it feels like you’re not actually spending money, cancel your credit cards, and make all your purchases in cash. This will make you more aware of what you are spending, giving you a clearer perspective. Use a computer program or a paper ledger to take control of your finances. Computer programs are better because they are more flexible with reports and categories. I suggest a program like Quickbooks with a very user friendly interface.
Make a budget for specific needs and purchases. When you go shopping, make a list of what you really need, and only buy exactly what you need. When you see something you want to buy, don’t immediately buy it. Make a note of it rather, along with its price, and give it about a week to make a decision. Many times you’ll find out that it isn’t that important to you, or maybe you’ll find a better deal somewhere else.
Third, educate your self about managing your personal finances, and constantly improve your plan as you go. It’s not simple enough to stop bad spending habits, you also need to know what better habits you want to have instead of the bad habits. There are tons of resources if you want to improve your financial skills – from budgeting to accounting, to saving and investing money. Make sure you spend some time regularly to read books, go to seminars, and generally educate yourself to manage your finances better. Stopping your bad spending habits is only the first step to taking control of your financial future.