5 Effective Ways to Break Your Bad Money Habits

So you have bad money habits? For starters, congratulations on recognizing that you have some habits you need to change. Now it’s time to take the actions necessary to get your financial house in order.

Here are 5 effective ways to break your bad money habits.

1. Go Healthy

Believe it or not you can save money and improve your health at the same time.

If you decide to stop buying booze, fast food, and cigarettes, you’ll go a long way towards saving money and possibly even keeping the doctor away. You can literally save hundreds of dollars over the next year if that’s the only way that you change your spending habits.

Of course, you’ll also be cutting back on carcinogens, alcohol, and (probably) fatty foods. That’s not only going to help your wallet, but it’s also likely to improve your health.

2. Manage Your Credit Wisely

If you have a credit card and you’re maxing it out and/or not caring about paying your bill on time, then you’re hurting yourself and putting financial future in jeopardy.

For starters, if your credit card is maxed out, it’s probably because you’re not doing a good job at controlling your spending habits. Avoid impulse buying by shopping less and only going to retail outlets where you’re not likely to be tempted to purchase something you can’t resist. In other words, stay away from shopping malls.

Second, if you don’t take your credit card debt seriously, your credit score is going to suffer. That’s going to hurt your ability to get a loan later on. If you have any desire to buy a house or buy a car with an auto loan, you’re going to struggle if you have poor credit.

3. Save

Chances are pretty good that if you’ve got some bad money habits, then you’re not saving any money. That needs to change.

If you want to save money for college, for a down payment on a house, or to buy a high-ticket item, you’re going to need to set at least a small portion of every paycheck aside. Set up an auto-draft so that money from your checking account automatically goes into your savings account every couple of weeks. That way, it takes the decision about whether or not to save out of your hands.

4. Keep You Balance Healthy

If you have a habit of writing checks that bounce, you’ll need to change that immediately.

Give yourself a buffer. If your account falls below a certain threshold, then you don’t write any checks against it or use your ATM card. Make that threshold high enough that you don’t overdraw in the event that a check you wrote a while ago is presented for payment.

5. Don’t Spend Money

Here’s the best way to break your bad money habits: don’t spend money.

You might think that’s a ridiculous piece of advice. After all, everybody needs to spend some money.

Correct. But you’re attitude should be: “I’m not going to spend money.” You’ll need to spend it sometimes, of course, but you’ll do so only reluctantly and you’ll spend a lot less overall.

Bad financial habits are made to be broken. Fortunately, with a little bit of desire and the right know-how, you can dump those bad habits.