It is said that it takes 21 days to develop a habit. Sounds easy, right? What’s more difficult is breaking a bad habit. For instance, you may have a lot of habits when it comes to spending your money, and some of them may not be helpful in building your savings. In many cases, we make financial decisions without giving them much thought, resulting in regrets and disappointment later. If it’s relatively easy to develop a habit, how can we break a bad one? It takes more time than it took to develop it. You need to commit to breaking those unhealthy habits and changing for the better.
Budgeting is not done to deprive yourself, it’s about gaining a better understanding of your money spending habits and determining where your money goes.
What are the bad money spending habits that you should break? Take a look at this list:
#1 Not setting financial goals
In any activity, you need to set goals, so you can strategise and keep track of your progress. The same goes for your finances. Without goals in mind, you’ll just spend a lot without thinking about your savings. You’ll also not be motivated. Goals can be short-term or for a long period of time. Just make sure that they’re specific and realistic.
#2 Not creating a budget
Budgeting is not done to deprive you or prevent you from enjoying the fruits of your labour. It’s about gaining a better understanding of your money spending habits, determining where your money goes so you’ll know how much you can spend. In this way, you’ll have a clear picture of your cash flow and come up with ways to spend money wisely. Consider shopping on a budget, which means setting a limit for yourself about the amount of money you can spend. For some people, they’re into “cheap shopping” mode, thinking of ways to buy what they need without breaking the bank.
#3 Not having a savings plan
The formula should be: income – savings = expenses. But for many, it’s income – expenses = savings. Pay yourself first. You can start saving with a small amount every month and just increase it over time. One great tip is to set up an automatic transfer directly from your pay and into a separate high interest savings account. In this way, you’ll be able to build your savings.
Do you have other tips for shopping on a budget and breaking bad money spending habits? Share your ideas in the comments section.