You’ll specifically use this article in Step 3 of The 8 Steps to Financial Freedom. However, it’s beneficial to review it in all steps.
We all have them.
You know, those bad spending habits that break your spending plan on a monthly basis.
It could be that you like to shop for shoes.
Maybe you always have to have the most up-to-date electronic gadget.
Whatever it is, you probably already know it’s a problem.
If you’ve created your income statement, you’re probably finally getting to see the dollar figures associated with your overspending.
Just know that what some people might see as overspending, could be right in line for you and your spending plan.
I guess what I’m trying to say is, there’s no need to follow guidelines.
For example, if you consistently cut back on other spending so that you can dine out four times a week, more power to you.
You’ve identified what’s important to you and made it happen by being frugal in other areas.
If your spending plan is still functioning properly and you’re meeting all of your goals, overspending in that category isn’t a problem for you. Don’t let anyone tell you it is.
But what if that isn’t the case?
What if you only want to spend $50 a month dining out, but end up spending $250?
You may be looking at a bad spending habit and it’s time to face the problem and battle it until you get it under control.
As you already know, it’s stopping you from saving money or even worse, causing you to pile on debt.
Get started working on those bad spending habits today by using these tips.
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1. Take Only The Cash You Need
Heading out to the mall to go clothing shopping?
Only take the cash you need.
If you’ve allotted $100 for clothing this month, hit up the ATM and get $100 cash out.
Throw that $100 in your wallet and leave all of your credit and debit cards at home.
Yeah, you read that right. LEAVE YOUR DEBIT AND CREDIT CARDS AT HOME!
You will be forced to only work with the cash you have on hand. No more saying, “Well, the bill is $110, so here’s $100 in cash and I’ll just put the remaining $10 on my credit card.”
2. Know Your Spending Triggers
How did you feel the last time you had a budgeting breakdown?
Were you upset over something? Were you bored?
Start tracking how you feel when you splurge on a specific item.
For example, if you buy a soda every day at 2:00PM, write down how you were feeling. Maybe you were bored. Maybe you ran out of things to do.
By identifying the underlying issue, you may be able to find ways to avoid the expense all together.
Trent Hamm has several good ideas to assist with handling these “bad days”.
Personally, I’ve started taking a short walk to handle my typical “afternoon snack syndrome”. When I have the craving, I just get up and go.
3. Visualize the Prize
I’ve discussed the advantages of setting financial goals.
Now that you have them, put them in a prominent place so you have to look at them each and every day.
This will constantly remind you of WHY you are cutting back on expenses and/or sacrificing some things that are difficult.
If the list isn’t enough, add a picture of something that you are striving to achieve.
Looking to buy a house? Print off a picture of something you like in your neighborhood and stick it on the refrigerator. Instant motivation!
4. Leave and Come Back
If you are looking to make a purchase, force yourself to think about it.
Put the item back and only come back to it after you have had time to let it sink in.
I actually recommend doing a “walk-through” before making purchases.
This entails taking no cash or debit/credit with you when shopping.
Since you have no way to spend, you can truly weigh the costs and benefits of a purchase. It it’s something that can truly fit in your spending plan, only after you think it through should you consider buying it.
5. Shop With a List
What happens when you go to the grocery store for milk because you ran out mid week?
I bet you come out with a rotisserie chicken, macaroni and cheese, grapes that were on sale, and several other items.
Am I right?
When you go shopping without a list, it’s really easy to go crazy.
Therefore, start writing down only the things you need and stick only to that list when shopping. Have a plan.
Have trouble sticking to a list? Find someone who can.
Send your spouse who follows instructions with great detail. Send your teenage daughter whom you’ve trained well.
6. Know Your Weaknesses and Avoid Them
When you go to the mall, do you always end up doing more harm than good?
Maybe you just went there to meet a friend for coffee and ended up with some shoes, a nice new jacket, a soft pretzel, an ice cream cone and to top it off, you had your eyebrows threaded.
All you went in there for was to meet up with your friend from college!
If your weakness is the mall, avoid it at all costs. Why put yourself through that?
I’m not saying that everyone’s weakness is the mall. Heck, yours could be the cheese deli at the grocery store for all I know.
Just know what makes you weak in the knees and stay away!
7. Tell Your Family and Friends
If you are trying to avoid your weaknesses, letting your family and friends know is a good idea.
Trust me, trying to avoid the mall and having your friends want to go there all the time makes things tricky.
It’s even more difficult if you’re watching them spend money.
Having a quick conversation with them about your issue is no big deal. You can even phrase it to look like you are being responsible. Try this:
Hey Jane. Do you mind if we start hanging out at my house instead of the mall? I’m trying to save for my kitchen remodel and you know how I get at the mall!
Pretty easy right?
If they’re truly your friend, they’ll understand and support your decision.
8. Inventory What You Own
Have you ever gone to the grocery store, bought something and then discovered that you already had it in the pantry at home?
Yeah, it happens.
Take an inventory of the items that you own to ensure that you are not duplicating purchases.
You can do this with almost anything, including clothing.
A good tip is to take a picture of the contents in your refrigerator and pantry before heading to the store.
Not sure if you are out of ketchup? Check the picture!
9. Go Cold Turkey
I recently came across Anna Newell Jones’ blog And Then We Saved and I must say, I’m impressed.
I’m a big supporter of having someone to look up to in regards to debt repayment. In other words, if you are looking to get out of debt, it’s extremely motivating to read about someone else who has done it.
Anna has done that.
In fact, Anna went COLD TURKEY and completed a spending fast.
She broke down her expenses to the bare minimum and ended up paying off over $23,000 in debt within 15 months. Anna had a great deal of drive and accountability. You could learn a lot from her!
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Take Baby Steps
Let me start of by saying from personal experience; you are not going to change your bad spending habits overnight.
Just as it took you several months or even years to create the habits, it’s going to take a little while to break them.
Do not let that discourage you.
Even a slight change in your habits can have a lasting effect.
If you try to cut too much, you might fall off the wagon and end up right back where you started, or even worse.