How To Change Bad Spending Habits

One of the best ways to change bad spending habits is to cut up all your credit cards. Money that you spend using a credit card is money that doesn't belong to you. You have to pay it back - along with interest, which makes the purchase price of your item that much more expensive.

A debit card is much more preferable. That way you can't spend more than you have in the bank, but even that can be dangerous if you are prone to impulse buying of luxury items.

Another way to change your bad spending habits is to sit down and really look at the things you have spent money on in the last few months. Ask yourself if they were really needs or wants.

A want can be classified as something that you can get by without and still live in reasonable comfort. That expensive pair of shoes could be a want - unless you don't have any! Even some food can be considered a want, rather than a need. Dining out is not a need unless it is part of your job description. Salesmen for instance often close a deal over a meal. In this case their meal is a need. Taking the kids out every evening is not.

Once you have defined what your needs are against your wants, the next step is to look at your future. Do you have a big need coming up in the near or distant future?

Maybe you need to start saving for the children's education or your retirement. Maybe you have decided to save for something that isn't really a need, but will help you to learn to save, so it is good in itself - something like a trip overseas or a cruise.

This can be classed as setting long-term goals and will help you to change your bad spending habits. You will be motivated by what you want (or need) in the future.

Taking charge of the finances by keeping a record of all the incoming and outgoing finances can also help you. By seeing exactly where your money is going, you may be more motivated to save it instead of spending. Just sitting down and keeping a record of where all that small change went to can make you more aware of spending habits that are unnecessary.

For instance, buying your morning coffee on the way to work can add up to a sizeable amount by the end of the month, especially when there is good coffee to be had at home. The same goes for buying your lunch. The cost of one bought lunch will keep you in lunches for a week if you make them at home. Most work places provide a fridge to keep food in; otherwise, you can take yours in an insulated bag.

Changing bad spending habits can only help you in the long run. Why not give it a go? You'll be glad you did.

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quote openProfuseness is a cruel and crafty demon, that gradually involves her followers in dependence and debt; that is, fetters them with irons that enter into their souls. quote close

~ Samuel Johnson

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