Your spending habits will likely mean the difference between having a comfortable financial cushion or feeling stressed about making ends meet. The good news is your spending habits aren’t set in stone, and they don’t define who you are.

You have the power to change your habits for the better.

People understand balanced eating and exercising are good for their health. Doing these gives you more energy, a longer life, and a higher quality of life. Yet many of us struggle to do them because they aren’t habits.

When something isn’t a habit, it’s pushed aside when life gets in the way. Kids, work, and family obligations are all examples of events that can knock us out of a routine; they also affect the financial decisions we make.

The key to living our best lives is to take the choice out of the equation by developing habits. 

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How Did Your Spending Habits Develop?

The first step to changing your habits is understanding why you have bad spending habits in the first place. When you were a child, did you see your parents exhibit the same behaviors? Maybe you had a role model you looked up to who tended to make spur of the moment buying decisions and spoil you.

There’s also a chance you developed these habits as you became an adult. Do you make purchases as a distraction to avoid thinking about work or other pressing issues? Or maybe you use spending as a way to cope with stress?

What are your spending triggers? Do you find you spend more after you’re paid or with a specific group of people? Shopping addictions, social pressure, stress, anxiety, social media, and family expectations are all common triggers.

Related: 6 Causes of Overspending That Are Holding You Back

List Out Your Bad Spending Habits So You Can Fix Them

Listing out the bad money habits you have isn’t a fun experience. It may be excruciating, but it’s essential. Be kind to yourself and forgive yourself for prior mistakes. No one is perfect. Relapses happen.

A few common negative money habits include:

Spending more money than you make

This one hurts because it’s getting harder to make ends meet in the U.S. According to a report by Pew Research, wages have hardly budged in decades, while inflation has caused goods to get more expensive. That means your parents had it easier when it came to saving money.

This isn’t an excuse for why it’s okay to spend more than you make. It’s more of a wake-up call to be better with money today than any previous generation before us to live the lives we want.

Read: Do More, Not Less, With a Budget

Buying things you don’t want or need

We’ve all been walking through a store when we were overcome with the desire to buy stuff. It could be a pair of boots, a new jacket, or even a new car! They aren’t even things you need. You simply want them.

The act of purchasing them is giving you a psychological payoff. To turn things around, rely on the 48-hour rule before you make a purchase. I keep a running ‘to-buy’ list on my phone.

If I want to buy something, I add it to the list along with the date. I then revisit the list 48 hours later and see if I still want it. More often than not, I realize it was an impulse.

For big purchases (furniture, electronics, appliances, etc.) I will wait for 30 days. It has made a world of difference.

Spending money on things when you know you have an important bill coming up

When you don’t have enough money, but you still buy things even though you know you have outstanding bills (like rent, car payments, or school bills), the results can be devastating. This type of behavior is harmful and can cause your life to go down in a tailspin.

Using a credit card without having the cash to pay it off

When used correctly, credit cards can be a powerful way to protect yourself and save money via cashback and other rewards. However, the moment you use them to buy things without a plan to pay them off in full, you’re opening a can of worms.

Saving whatever is leftover at the end of the month

Saving money is tricky enough, but trying to do it without a plan is sure to fail. It’s always best to ‘pay yourself first’. This means you set aside money for savings right away when you get paid and then spend the rest. Many people have it backward.

Giving up when you aren’t perfect

Striving for perfection leads to bad money habits because you set yourself up for failure. No one is perfect. You’ll fall into an old-money habit along the way. If you give up or lose hope after a mistake, you’ll never develop the killer money habits you need.

To combat this, practice self-compassion and use a slip-up as an opportunity to learn from your mistakes and grow. Evaluate what happened and why you weren’t able to avoid it. What can you do better next time?

It’s essential to understand when our worst money habits come out so we can be on alert during those times and remind ourselves why we’re developing good money habits.

Prioritize which bad habits you want to break

If you have a handful of money habits you want to change, fixing everything won’t happen overnight. This means you need to pick the two that have the most detrimental effect on your financial situation and prioritize them.

Know what triggers them. Write down how you feel before, during, and after you let a bad habit get the best of you.

The Steps To Building Good Money Habits

Understand your ‘why’

Building good money habits is critical to make better decisions with your money. It can improve your quality of life. It can allow you to provide for your family better. And it can even help you feel better about yourself.

You need to understand why you want to build better habits. The reason for this is breaking old habits can be hard and take several months. In moments of weakness, you need to remember why you’re doing this.

If you want to build better money habits because you want to help a child pay for college, you should keep a school photo with you as a reminder. If you’re shopping online, take a moment to look at the photo and picture them graduating from college before clicking buy now. It could make all the difference to remind yourself why you’re working hard to change your habits.

Start using cash to buy things

If you’ve tried to kick a bad spending habit and haven’t had success, you need to put those credit cards away and use cash and debit cards. It will provide a hard spending cap for you, and it will keep you from racking up dangerous debt.

If you’re used to swiping a credit card, it could take more time to get used to having to check your bank account to make sure you don’t overdraft, but it’ll become second nature. You could even call it a habit.

Track your spending and automate your savings

If you know anyone whose money habits you admire, I guarantee they track their spending carefully. They know what their money is spent on. There are no surprises. You can use our app or a simple notebook to track your spending.

Automate your savings as much as possible. According to Lucas Woodley, president of the personal-finance club at Harvard University, “The best tip I, and the people I’ve worked with, use to improve our spending habits is to automate the saving process as much as possible.”

Woodley adds, “far too many people underestimate or don’t understand the psychological difference it makes to have part of your paycheck automatically set aside, but it forces you to base your spending habits around the amount of income you *should* spend rather than the amount you *could* spend.

Think of it like budgeting with after-tax dollars vs. pre-tax—you wouldn’t create a budget without paying Uncle Sam, so do the same when it comes to paying yourself.”

In other words, automating your savings will force you to build the habit of saving and spending less than you’re used to—a double whammy of awesomeness.

Read: 5 Reasons Budgeting Apps Don’t Work for Most People

Socialize your goals with others and find an accountability partner

Social accountability is a powerful tool you need to have in your toolbox. Have you ever found you’re more likely to do something if others are expecting you to do it?

You aren’t alone.

Let’s assume you want to break the habit of drinking a glass of wine every day after work. If you tell your friends, co-workers, and family members you only drink wine on Friday nights, you’ll be much more likely to do it than if you don’t tell them and keep it to yourself.

If you don’t have any social support or accountability, you’re more likely to reach for a wine glass after a hard day of work where a few things didn’t go your way.

And you know what will help you build the new habit even more quickly? Finding an accountability partner to do it with you and keep you honest.

Reward yourself

A lot of us are perfectionists. It means we punish ourselves when we make mistakes and then barely acknowledge when we do things well because that’s what we expect. However, that pattern needs to end.

For our brains to develop habits, we need to have an action followed by a reward. That means if we want to get into the habit of saving $100 every week, there must be a reward waiting for us if we do it.

It doesn’t have to be extravagant or include discretionary spending, but it must be something you like or enjoy doing. For example, if you’re a reality TV junkie, you may only watch your favorite shows during the weeks when you reach your goal. The Bachelor will be your payoff for sticking to the new habit.

Before long, you’ll be saving and using your reward to fuel you on your way.

Remind yourself of your ‘why’

Finally, remember certain days will be harder than others. Life is always throwing curveballs at us. You must revisit your ‘why.’ It’s the reason you’re even going through the process of undoing the bad habits you’ve picked up along the way.

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Get Help From A Proven System That Works

Qube was designed to help users build healthy money habits and reach their financial goals.

Do you want to stop stressing about money? Do you want to say yes when an exciting opportunity arises without having to make sure you have enough money first? Or do you want your kids to have more opportunities than you did? If so, sign up for the waitlist for Qube. We built a system that has been proven to help families save more money.

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