5 Bad Financial Habits, And How To Break Them

So often I will think of something as fixed; I run late because I have a lot on, I get caught in the rain because I don’t have a car, I forget things because I have so much to remember. But, in the cold hard light of reason, it quickly becomes apparent that these things happen to me, not because of bad luck or an malicious universe, but because of my bad habits- bad preparation and organisation creates bad luck. So, while we might spend our days cursing our financial luck, perhaps we should be looking, not at the stars, but at our own financial habits. Here are some classics, and tools to get yourself some new ones.

Habit #1: Spending On Late Fees

Always paying late fees because the universe is unkind? Or because you’ve just got so many deadlines, you can’t fit all of them into your brain? Wrong. We pay late fees because we’re unorganised. There’s no other reason for it, and no other explanation cuts the cloth. Luckily, you’ve got yourself a very quick, easy way to save some money. To fix it- chuck a calendar on your fridge and mark all the dates. Not just the big ones, but the ones that slip through the memory. Set a reminder on your computer. Or, save all the stress, and pay the bills the day they come in

Habit #2: Nothing Left Over

Get to the end of the month and pity your lack of savings? Or hear all your friends talk about the big things they’re saving for, and feel ripped off? No longer. Time to recognise it all happens with you- your lack of saving has nothing to do with your lack of income. Putting aside extreme examples, there is room to save in most incomes. There are a couple of ways to break the habit. Pay your savings first, and do it via an automatic deduction. If you have a real tendency to crack into the savings, put it somewhere you can’t touch it. The other method can be my fav- the envelope method. Set your money- in cash- into the necessary envelopes. Rent, groceries, utilities and savings. What’s left can be the discretionary spending (though there’s no imperative to spend it all, obviously). Not only will this force you to set aside money for savings every week, it will also grant you greater appreciation for exactly how much money you have left over for life’s little luxuries.

Habit #3: Spending All You Have

Guilty as charged. While the envelope method is a great one, it tends to feed into my mind frame of spending everything until it’s gone, and then having to pinch pennies until the next pay check comes in. This is as much a psychological problem as a financial one- a bad habit in mental form. Changing it is about changing the messages in your head, slowing down your mental processes and looking at the reasons you spend. For me, spending is an unconscious thing. If there’s money in my wallet, I’ll spend it like it’s burning a hole. I do it habitually, and without thinking, frittering it away. For others, it’s a comfort thing, others a compulsive reaction. Once you know your triggers- a stressful day, tiredness, boredom- you’ll be able to watch for them far more easily and start changing your thought patterns.

Bad Habit #4: Thoughtless Generosity

Ever bought a round of drinks when you swore you’d only have one? Or shouted a dinner for no reason? It’s a knee-jerk reaction for a lot of people- either as a status symbol or as a genuine generosity gone awry. Instead of spending money you don’t have on other people, start thinking about ways to be more consciously generous. Giving time, or making a present. Creating space to have a proper catch-up. It’s worth more, and won’t leave you financially undermined.

Habit #5: Mañana Mañana

Procrastination can be thought of as a personality trait, but is more likely to be a bad habit learnt a long time ago. It’ll also have a devastating effect on your finances- you say you’ll fix your super arrangements and then leave it until you’ve forgotten. You could lose thousands of dollars to your habit. To break it, you’ve just got to start doing things as soon as you think of them. It might be inconvenient, but getting in the routine of doing things immediately will shortcut your procrastination tendencies. Or write a to-do list in your lunch hour and aim to have it done before you get back to work. The amount of time and energy you will save by avoiding procrastination will be a god-send.

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