Break Your Bad Money Habit

What's your bad habit? Twirling your hair? Cracking your knuckles? What about your bad financial habit? Maybe something that is less noticeable from the outside, but is just as hard to break as, say, biting your nails?

We all have bad financial habits. The purchases we make that make us cringe because we overpaid for something. The purchases that feel so unavoidable but that could end up saving you money if you could just find a way to stop them.

Recently, the Smart Cookies received an e-mail from a woman who visited our site and downloaded our new ebook, The Smart Cookies' Quick Start Guide. She asked for our advice about those exact purchases.

She explained that she was overwhelmed by her numerous financial bad habits that were spiraling out of control, which is a feeling we had all experienced. Our advice? Pick a starting point. Think of your most expensive bad habit, the one that is costing you the most.

In giving this advice it got the five of us thinking about our expensive habits. Despite the fact that we all save, invest and are clear of debt, we still have those nagging behaviors that we just can't seem to shake. The behaviors that are responsible for eat at our savings goals and causing restless nights.

Andrea: "My struggle recently has been eating out for lunches or coffees due to client meetings or coffee meetings with potential clients. With the start of my own business, I find that I am doing this A LOT and often. I try my best to cut back but sometimes it's unavoidable."

Katie: "I still struggle with buying stupid little cheap items (i.e. Vitamin Water every time I am at the drug store) instead of just buying the things I actually need!"

Angela: "I struggle with keeping on top of paperwork that could bring in money, like filling expense forms, or rebate forms. I recently bought a new phone that offered a $100 rebate, and I fully intended of mailing it in, but then it slipped my mind and now I'm out of luck."

Robyn: "Car repairs. I tell myself over and over again that I'm going to stay on top of my car maintenance, but then months go by and I get stuck with a bill for thousands that could have been avoided had I gone in for my regular oil change."

And myself? I struggle with spending for convenience. I'll pay $12 for parking because I haven't planned ahead to locate the free spots or bother to have parking validated. Or snacks on airplanes because they are there and I haven't thought ahead to pack my own.

By coming clean to each other and confessing our expensive habits we were still struggling with, it was like we reliving our original money group again. We decided to work along with other Smart Cookies and make a plan to conquer our most expensive bad habits once and for all. Here's what we did to get organized and get focused

1. We added up what our habits cost us the past three months:

Andrea: $500

Katie: $450

Angela: $330

Robyn: $1200

Sandra: $630

2. Then, we wrote down what we would have "rather" spent that money on. A yoga pass, a nicer birthday gift for a friend and a new dress to wear to a summer BBQ. Let's just say we had no problem thinking of better uses for our bad habit money.

3. We wrote down one thing we could do each week, for four weeks to build new habits to overcome our bad habits.

For example: For Angela, in order to help her organize the mail back rebates and other money savers, we gave her permission to go buy a cute filing system she would actually leave out on her counter and be reminded to use. So we found her a very stylish canvas tray labeled: TO DO - TO EARN MONEY. Each week she spends thirty minutes to an hour making sure she's collected all of her "to-dos" and paper work and has it all completed and ready to be e-mailed or snail-mailed away.

4. Finally, we added up our savings each week and told one another how much we saved by changing our expensive habits.

It's easy to forget how much you can save and how easy it is with a little focus. Small steps can mean big changes. If you start with one small habit and change it, you'll be amazed at the difference and it will give you the encouragement to conquer another habit. So try adding up your expensive habit and challenge yourself to find the financial confidence you didn't know you had.

More from Smart Cookies:

Can Being Positive Help You Save?

The Power of Friendship and Money

What is Your Financial Goal Worth?


Photo by iStock.

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