Ever stepped on chewing gum while walking down a street? (Disgusting, we know…you’re already getting the picture) It’s Easily squished by your weight until you take the next step and realize how it can be such a pain in your “behind” getting gum off your shoe.
For most people, it’s the repetitive actions they take after earning that form their saving and spending habits. Bad spending habits and behaviours are surprisingly easy to acquire and stick in your mind like a daily routine, yet, it can take months to years to unlearn.
The unlearning process needs to be preconceived. When you are concerned by how your spending impacts your finances, then it is easier to identify your bad spending habits and use various ways to unlearn them through good money management practices.
So, why do you often spend like you’re on autopilot when you earn money? And why does it get worse the more you make it?
What was the last thing you spent more than $10 on? How did you feel imagining yourself within before you paid for it?
We all form spending habits from what triggers us to spend. Our money triggers are often shaped by our thoughts about what we spend on. If I get this gold chain, I’ll look rich. If I save for this classic watch, I’ll look more sophisticated or if I get to buy the Terrific Tuesday fast-food offer, I’ll save money.
Our inner views about how what we feel and how we view ourselves after we spend on often justifies our spending habit to us. Most of these views are externally motivated and are shaped in the contexts of family, popular culture, school, broadcast, print social media and entertainment. These easily form the money behaviours that we then believe is part of our personality.
So we can actually adopt unhealthy spending habits that we ourselves have justified in our minds. Having a wealth mindset enables us to have a balanced approach to evaluating our personal finances.
We not only focus on what we want but what effect that will have in our journey of wealth creation and the long term impact of our financial decisions.
There are many ways to get gum off your shoe. But the crudest is often the first that people try, dragging your sole on the ground. This damages the shoe. Other methods may take your time and concentration and will work. But ultimately, watching your step as you walk in the street will save you the time and mental bother it would take to get it off.
Spending well starts from thinking the right way about earning and spending. But when you realize you have a spending problem, the next best thing is to pinpoint it, learn about solutions to deal with it and apply. Here you go:
You’ll only know where you’re overspending (and under-saving) if you track it. Have weekly or monthly evaluations to see where how much your expenses take and differentiate them from your wants, needs. Sometimes you may be spending on emergencies while other times you may just have spotted financial leaks. You will begin to condition your mind to the right spending and control your outflows.
Most people would admit they’ve made a purchase to either avoid negative situations or stress or to celebrate the good.
Find healthy coping mechanisms that won’t negatively impact your finances, like exercise, connecting with friends or family, pursuing a hobby or pitching in to help someone in need. Justifying poor spending habits creates denial. This is why you need financially healthy options that boost your spending confidence and promote proper spending. This promotes a positive response within you and conditions your emotional spending.
When you focus more on how you will return what you borrowed instead of how you will spend it, you take personal responsibility.
This introduces to your mind the reality that you control where your money ends up and your financial fate when you owe a debt. It helps your mind to adjust to self-made constraints to spending to avoid a financial setback or uncertainty that comes with how to clear your debt.
Convenience is the best-paid commodity of the 21st century. In a world where you can search big name brands on a website or app and the products can have their products at your doorstep for a small fee, you can easily think you’re not spending that much.
Before spending on a convenient offer, the product you suddenly now want, or the extra services that come with a purchase, align your financial goals to them. Take probation like 48 hrs before spending anything above $50. Evaluate what else you could spend on that would give you more value or help you earn more to avoid spending on liabilities, recurrent bills or financial leaks. This fine-tunes your spending habit to noticing value in spending and cutting on costs to save your money.
A budget can be eye-opening. Necessary expenses like house rent, utilities, transportation, food, data and loan payments need to be prioritized spending. Your budget often lays bare your essential needs and reveals how much of your disposable income is left after you handle your essentials.
It takes a conscious effort to change your spending habits. Try to think about it as forming a new, healthy habit rather than breaking a bad habit. Watch how you practice good spending habits and keep focusing on your financial goals and wealth vision.
Keep learning in your journey towards financial freedom