How to Transform Your Spending Habits

Posted in Budgeting on August 21, 2021

We all have habits. Some are good, like making sure we always lock the car door before we leave our vehicle unattended. Others are bad, like being totally unable to avoid buying an extra bar of chocolate at the checkout counter.

Although some of your habits might not have too much of a negative impact on your life, poor financial practices can quickly add up to disaster. If you’re too careless with your cash, or you’re constantly living in your overdraft, then you could be putting yourself in a dangerous position and making it harder to achieve your long-term goals.

So, how do you transform some of the negative practices you’re used to in your life, into something good? Here are some good ideas.

1. Set Goals for Yourself

It’s much easier to spend the cash you should be saving, when you don’t have a clear vision for where that money is going to go. You can see an extra £50 in your bank account and immediately decide to spend it on something like a new game or a restaurant meal. It’s not until later that you realise you could have put the money towards your savings.

Setting goals for yourself, both long term and short-term, will help you to identify the best “next steps” whenever you have some extra cash to spend. Whenever you’re tempted to buy something you haven’t budgeted for, you can also ask yourself whether that purchase is taking you closer to your goals or not.

2. Live on a Budget

Most people don’t love the idea of living on a budget, but it’s really the only way to make sure you know how much cash you have to spend each day. If you don’t know how much of your money goes towards debts, and bills, how do you know whether you can really afford to make the repayments on the new loan you want to get for your car?

Living on a budget helps you to make informed decisions about what’s possible with your cash. It’s also an excellent way to become more aware of your trigger areas where you’re spending the most cash. If you know you typically spend too much on clothes, then you can avoid visiting fashion shops, and set restrictions to stop yourself from buying too much online.

3. Have an Accountability Partner

If you’ve ever tried to break a bad habit before, you’ll know how difficult it can be to do anything on your own. It’s easy to convince yourself that it’s not going to be too bad if you just spend a bit of extra cash on a coffee when you’re heading to work. That’s why it’s so helpful to have someone else in your life that you hold yourself accountable to.

It isn’t this person’s job to make sure that you spend money in a certain way. Instead, they’re there to check on how you’re doing when it comes to making progress on your financial goals. Just knowing you have someone to hold you accountable can be enough to make you think twice about spending.

4. Be More Deliberate

Often, we end up regretting purchases that we don’t spend enough time researching. That’/s because you can usually find a better deal for the items that you want online. Plus, if you rush into buying something on impulse, you may decide later that you would have rather spent your cash elsewhere. With that in mind, make a strategy for being more deliberate with your cash.

If you see something you want to buy, start by researching it online to ensure that you’re getting the right deal. Read reviews to see if it’s worth the cash, and ask yourself whether this product is going to really benefit you, or not. If it is, take your time to find the best possible deal, and be happy in the knowledge that you’re not spending more than you need to.

5. Be Flexible

Finally, although it’s important to have rules in your spending to stop you from going over the top, it’s also worth noting that there needs to be room in your budget for fun too. You’re never going to be able to stick to a budget if you don’t give yourself any leeway to buy the things you want from time to time. Put a little bit of cash from your income away each month just for you.
If you’re struggling to find that extra cash, it might be time to start looking for things you can cut back on. Or maybe you can get a better deal from one of your service providers?