Many habits are hard to break and some can be more damaging than others, but you can make positive changes if you know how to go about implementing a new strategy that breaks the pattern and shows you a better way forward.
For example, if you find that your spending habits are not in line with your income or you just want to learn how to keep more of your money and cut out unnecessary spending, read on for some practical pointers that could help you to achieve this goal.
Here is an overview of the changes you might need to make and why, plus a look at why a budget is so vital and how to make the most use of that information, and a tip to help you gain the discipline needed to change your spending habits for the better.
Consumed by credit
One of your main priorities is to be honest with yourself and if you are going to find a way forward that gives you greater control over your spending and your overall financial situation, you need to recognize the signs that something needs to change.
Do you ever leave home without your credit cards?
If you can’t remember the last time you went shopping or anywhere without having your credit cards with you, that is a classic pointer which suggests you might be too reliant on your plastic to fund your lifestyle and purchasing decisions.
The issue that so many of us struggle to contend with is that charging an item to your card doesn’t always feel like you are spending real money and the reality only hits you when you get the monthly statement and see just how much real money you have actually spent.
There is a simple but effective trick to try that will help you appreciate how much you are spending and reduce your credit card debt at the same time.
Try leaving your cards at home and take some cash with you instead. You will be amazed at how disciplined you become at resisting impulse purchases when you have to hand over your hard-earned cash in actual dollar bills.
Know your limits
Another important discipline that you have to learn if you are going to cut down your spending and improve your finances is to create a budget and stick to it.
A fundamental aspect of good money management is to create a personal budget so you know exactly how much money you spend each month and where it goes. Having this information will form the basis of your future spending plans and habits.
If you know how much money you have spare each month for discretionary spending like impulse purchases, that is half the battle. The other half of that battle involves sticking to that budget religiously and without deviation, as it’s too late to have regrets about what you have spent that month once you have left the store.
One example of applying that discipline would be if you were contemplating buying a new car. If you want the lowdown on certain makes and models you can read it at CarAdvice, but what you must also consider doing is work out how much you can realistically afford to pay for that car.
Buying a big-ticket item like a motor vehicle without properly working out a realistic budget could put unwelcome pressure on your personal finances, so learn to know your limits and stick to them every time you are thinking about buying an expensive item.
Staying on budget
It is highly likely that you will need a bit more than sheer willpower to help you develop better spending habits and take greater control of your money.
There are some strategies that you can use to help create that much-needed discipline.
A good approach to try would be to open a bank account that offers no-frills, no-fees checking facilities. Using your monthly budget figures, work out exactly how much spending money you have available for the month and then transfer that amount of money into this newly created secondary account.
Having a separate bank account which doesn’t have any monthly payments going out of it like you main bank account does, will help you to create a clear distinction between the money you need to pay bills and the money you have left over afterward.
Next step is to ditch the credit cards and leave them at home. Try a month or two of spending your spare cash using a specific account that has a self-imposed limit attached to it and you will find that your spending habits can quickly be transformed.
This can only be good news for your levels of personal debt and for your future prosperity.
Morgan Burton helps people manage their spending habits with his wise words and must-try money and budgeting tips.