3 strategies to break bad spending habits
As the holiday season reaches its crescendo and we approach a whole new year, you might be looking back and reviewing your finances.
Did you hit that savings goal you planned on reaching, eliminate your debt, or are you finding yourself even farther into the red?
In this post, we’ll give you a few tried and true strategies that will only help you curb your bad spending habits. Hopefully, by this time next year, you’ll have that nest egg you want and the none of the debt you don’t!
Leave the credit card at home
Buyer’s remorse? Consumers often think less about spending on credit than they would if they were using their own money via cash or debit. Credit offers instant gratification with the comfort of either paying off the purchase later in full or spreading out the repayment over stages.
This becomes a problem when you think of all your fleeting, disposable purchases using the same mindset. Those few pairs of shoes you bought on credit without thinking can rack up some interest if you’re not intending to pay them off immediately.
While credit cards can be used to build up credit and access some sweet rewards, if you know you shouldn’t be relying as heavily on credit, it’s best to leave the cards at home. If you have more than one card, prioritize which one will be active at which time and pay off the balances! You don’t need to walk around with five cards in your wallet all the time.
Go cash only
To help you leave your various credit cards at home, go cash only! Every time you get paid, set up a budget for the next week or two, and take out exactly how much cash you think you’ll need for your day to day expenses.
Having a visual reminder of how much money you have, and how much you have left, will help you spend more wisely. Make sure you factor in entertainment, food, laundry, transportation and the like so you won’t have to fall back on plastic until your next payday. Look back at how you tend to spend through old bank statements so you can estimate how much you'll need.
Prioritize your spending
You can replace a bad spending habit with a good one, too! If you’re like me, you might be spending money at a restaurant or bar, out with your friends without thinking twice about how much you’re withdrawing from the ATM.
When it comes time to get a new outfit for a special event or job interview, you scoff at the price tag on the racks. How dare a new set of trousers cost $50 when you just spent $100 at the bar, in two hours, without thinking?
Do you see where your (my) priority is wrong here? Choose to spend money on things that will last longer than a trip to the bathroom! Harsh? I know!
Make better spending habits
Above are some great suggestions available to anyone looking to break their bad spending habits. If you find yourself going over the edge whenever you leave the house or run some errands, sticking to a list can be a guiding force that keeps you on the straight and narrow. Leave your credit cards at home and bring out as much cash as you want to spend for the day or week. Once you make a good habit, it's just as hard to break as a bad one!