Most of us struggle from time to time with bad money habits. It often stems from a lack of financial knowledge, skills or confidence, but it can also come from being stuck in an unhealthy rut with our behaviors or thought patterns. Here are three of the most common problems, and some useful ideas for making positive changes.
Keeping your head in the sand
We’ve all had moments where we just didn’t want to think about our finances—especially when we’re extremely busy or stressed—but after a certain point it may become harmful. Running away from our problems never solves them.
This is totally normal, and it happens for a few reasons. Some of us simply never get into the habit of checking our money situation, or we might have had family role models who never openly discussed finances. Maybe you’re swamped with work, or frozen with real or imagined fears about money troubles.
Knowledge is power, and if you haven’t looked at your finances for a while then it’s time to catch up and get an overview to put yourself back in charge. However bad a situation might be, once you know where you stand it’s far easier to troubleshoot and start to sort things out.
Once your problems are under control, try setting a regular time for checking and monitoring your balances, and use automated alerts and payments to stay on top of the situation. That way, it doesn’t all fall your attitude to get back in the swing of mindful money, it’s already pre-programmed.
That last-minute getaway, new pair of shoes, or big night out seemed like a good idea at the time, but now you regret it. Been there! Short term mistakes can cause long term problems such as debt or failing to build up savings, whether it’s through big spending binges or constant small purchases.
Tackle it by looking at the situations and feelings that drive these behaviors. Does it happen more when you’re tired, after a few drinks, in a particular environment or with certain people? Are you feeling bored, down or lonely, or trying to compete with others?
Use an action-based strategy to break the chain, such as deleting credit card information stored online at your favorite brands, unsubscribing from tempting newsletters, or keeping busy with a new hobby instead of shopping all weekend. In addition, talk to your doctor if you’re worried about low mood or compulsive behaviors.
Not setting goals
People who make plans are the ones most likely to achieve their financial goals, but it’s so easy to get caught up in everyday life and never plan ahead.
Sometimes this is because of general feelings of overload, but it can also stem from an uninspiring environment, or an excessive optimism like “everything will probably turn out okay, even if I don’t make much effort.” Try showing some empathy towards your future self: how would you feel if you failed to achieve your most important goal?
A goal without a plan is just a wish, so try setting a small, specific goal first, and break it down into small, achievable steps. For example, if you want to save $500, you could achieve this by making five monthly payments of $100 or ten monthly payments of $50. Enjoy the confidence boost from your success, then move on to bigger or more complex projects.
It also helps to read more widely about personal finance, join an inspirational community, set goals publicly or privately, use apps to track your progress, and reward yourself for reaching your targets.
It’s easy to slip into bad financial habits, but by examining, monitoring and challenging our attitudes, we can all change for the better.
Penny Golightly is a journalist and author who set up her site to share bargain-hunting tips and information. After living below the poverty line as a child, she decided to avoid running up unnecessary debts as an adult and now lives happily and creatively within her means, and loves finding all the nicer things in life for less. She has written for titles including the Huff Post, The Times, The Guardian and Independent.