6 Ways to Conquer Bad Spending Habits

We always say that we need to save more and spend less, yet it’s easier said than done.

While on my money journey, I discovered many ways to curb my spending habits and take me from a person living paycheck to paycheck to someone who saves over 33% of her earnings.

So if you are like me, and want to learn how to curb your spending habits. Read on to the end of this post, implement the strategies I will share, and share them with other people who could benefit from these tips.

I know that it’s not the easiest journey to be on. But I also know, from personal experience, that they actually work!

What are these tips I’m talking about?

1 Make a Budget

Yeah, yeah I keep saying this. And people on the Giggedbz platform, like Angelia Guy, have even created products to help you get started on this. Check out her page by clicking HERE.

So why does a budget work?

When we budget, it forces us to make tough decisions about what we can or cannot afford in advance. We usually go through life making impulsive decisions, and realize that we can't afford something when it’s already too late.

A budget nips that in the bud, since you will already know what you can or can't afford the minute you sit down to do it.

Making a budget will also help you to know where your money is going. It shows you the big picture of your expenses. It also makes it easier for you to decide which expenses are the biggest and identify where you need to cut your spending.

By making a budget, you may realize that 30% of your salary is going to rent, and decide that you could do with a smaller, and less luxurious living space and still be happy.

But if you want to know more about the importance of budgeting, feel free to click HERE and read our budgeting post that gives you more in depth information.

2 Pay in Cash

Cash is king. Do you find that it’s harder for you to make a purchase in cash vs. just swiping your credit or debit card? That’s because paying in cash is phycological. It tells your brain that you are giving up your hard earned money. And letting go of it is usually harder.

A good trick to help you stick with your budget is by creating weakly or categorical envelopes. Use the cash in these envelopes, and don’t replace it no matter what.

So say you made an envelope to eat out during the week, it’s wednesday and you don’t have any money left in the envelope. Then you know that you have used up all your eating out budget for that week.

Slowly, you will start to have left over cash at the end of some weeks. Then it's up to you to choose to save or give yourself a treat, yet, all in all, you will be sticking to your budget, or making your money situation better.

It's all win-win with these envelopes, if you are disciplined enough to stick to it.

3 Know Why You Are Overspending

This is very important. People usually over spend because they are bored and decide to engage in an impulse buy. If you find that you spend when you are bored, it’s as simple as getting a hobby.

If it’s because of being an impulse buyer, points one and two will help you to evaluate your decisions and reduce your impulse purchases.

All these tips work well together. And being more aware of why we do the things that we do, is very important to change that behavior. Simply replacing them with something less costly would help you to reduce your spending.

4 Set Goals- Short Term Goals & Long Term Goals

Start off by setting easy, and simple goals. These will help you to ease into the bigger ones.

For example, let's say you decide that you want to buy a new dress. Instead of buying it now, give yourself a goal. Say, saving a quarter of the price every pay day for the next four pay days.

You will get a feeling of accomplishment, everytime you save 25% of the price, and get so much closer to getting your dress. And who knows, maybe in the end, you realize that you no longer want it.

Yet, this practice will begin to create positive money habits, and great reward loops that push you to continue working towards them. They will show you the power of setting and accomplishing goals.

It’s achieving these small goals that help to reinforce the good money habits. They are the foundation to developing rich mindsets, and growing our money.

After more and more small goals, and as your savings start to increase, you can then think about longer term goals like investing or starting a business.

5 Evaluate every purchase

Let’s say you need to fix something in your house, you realize that you need a specific type of screw driver but you don’t have one. Can you just borrow it from your neighbor instead of rushing to the hardware store to buy one that you may only use once?

Now, you have an event coming up. You realize you need a new dress. Before going to the boutique to pick up that one you saw online, why not go to your closet first?

Check to see if there is something you could use. And if you are worried about it being old, try to style it differently. Sometimes you can get a whole new look with the same piece of clothing.

These are just two examples of how we could evaluate every purchase, to find an alternative that could work, before actually deciding to buy something.

The more we do this, the better we become at finding alternatives.

6 Set Up a Savings Account

There is this popular ideology that says “pay yourself first.” The idea behind it, is that by paying yourself first, you are telling the universe that you deserve this money. It also means that your spending money will be less.

Yet, having less money means it leaves opportunites for your brain to be creative and to come up with new ways to make money, to make up the savings that you paid to yourself.

Luckily, today we live in a time when this can even be done before we access our money. If you get paid through a bank, you can set up a savings account with the bank, and have them automatically transfer your desired savings amount to your savings account the minute the money touches the bank.

Having a savings account that you never touch is great, and will allow you to accumulate more and more as you continue to learn to control your spending.

The Challenge

Try all of these for one week and see if it makes it easier for you to curb those spending habits, and save more money. I’m excited to hear if these helped you as much as they helped me.