It has surely happened to all of us. Despite how careful we are or even if we have the best of intentions, it’s so easy to find yourself getting into trouble with your money. Spending money is definitely fun; it’s actually one of the most relieving things to do in life. However, there’s a line and we need to figure out where to draw it.
Everyone has at least a few poor spending habits. Some of them might be quite minor, like for instance buying breakfast and coffee every morning instead of making your own and eating at home. Others, however, engage in much more severe spending activities, involving reckless credit card spending.
Some people simply can’t resist the urge to buy everything they see and want, regardless of whether they truly need it or not. This is not healthy and can cause a lot of dangerous situations, such as not being able to feed yourself, pay rent, pay your tuition, save money for bad days, etc. Not just that but these bad spending habits drift you away from the financial stability you desire.
To avoid getting yourself in such bad situations or accumulating more debt than you can handle, it’s important that you acknowledge and change your bad money habits as soon as possible.
The good news is that you can fix this behaviour. We will list a few highly effective fixes that will help you learn how to stop throwing money away necessarily. Not just that but we will also emphasise on other, more reasonable ways in which you can invest your money and time. Ultimately, if you spend smarter, your money will definitely go further.
We live in a consumerist society, therefore we have to learn smart spending habits in order to avoid sinking into the ocean of goods we want.
Check out our tips for quitting bad money habits that you might find useful when managing your income and decide to invest in online trading.
Admit that you have a problem
First thing’s first, you have to admit that you have a problem. Quite often it seems that people don’t really recognise their poor spending habits or keep defending themselves when asked why are they stuck in a certain bad situation.
In most cases, those reckless spenders only admit that they have a problem after they’ve already buried themselves under a huge mountain of debt, get evicted from their apartment or stay hungry for days. No one wants to be put in that unfavourable position. Therefore, measures must be taken before it’s too late.
One of the easiest ways to identify your bad money habits and start saving money is to track your spending.
Which takes us to our next tip…
Keep a record of your spending
That’s how you will get a clear picture of what’s really going on and it’s probably one of the best tips for quitting bad money habits.
One of the easiest bad money habits to fall into is not keeping a record of your spending. With contactless payment, online shopping and multiple accounts, you can end up spending money before it's even entered your account. The best way to quit this is to keep track of how you're spending.
Try downloading your bank's app so you can check your statements whenever and take note every time you refuel your car or notice when your monthly subscriptions are coming out of your account, for example. By keeping a record of your spending you can find out where you can save and what you can change.
Start by tracking your purchases for a month. You can also separate them into categories, such as rent, groceries, dining, etc. Calculate your overall expenditures for each category and see where you can make cuts.
This is probably the easiest way to see where your money disappears every month. We guarantee you’d be surprised to see how much you spend on things like coffee, snacks, drinks, etc.
Don't miss: Why Is Investing So Much Better than Saving?
Don't buy things you can't afford
It sounds simple, right? Yet so many people fail to do so.
With easy credit available on everything from mobile phones to sofas, it can be easy to say yes to expensive things knowing you can pay it off over time.
However, with interest, penalties for repayments and the tough financial environment, it's unwise to take out plans on things you can't afford unless it's really necessary.
Ask yourself the question, “Do I really need this?”
We get that it’s difficult. We are surrounded by advertisements of alluring products that can make our lives better, improve our image and lifestyle and we want them so badly. However, exercising self-control is essential to survive in our current environment and you have to make it happen.
See also: How Can You Start Investing With No Money?
Shop around
The good thing about living in such a commercialism-oriented society is that we do have options. In fact, we have so many options around us that there’s just simply no excuse for spending so much on something that can be found at a cheaper price.
The Internet is an amazing tool for saving money. Instead of just buying whatever you're used to, do a little research. Maybe your grocery shop could be done way cheaper elsewhere, or maybe you can find some coupons or discount codes. If you're making a big purchase, like a car or a TV, make sure you look around through a range of sites and get the very best price you can. Look around for sales and discounts or use coupons. There’s nothing wrong with that.
Use cash
We are already used to paying for everything through wireless card transactions. If it turns out that you’re spending way more on your card than you actually think you are, why not try using cash?
If you're going on a night out or meeting friends, take the amount you're comfortable spending out in cash and leave your card at home. If you really want to test yourself, take out enough cash for a week and try not using your card at all. Seeing a few coins left in your wallet is a lot more vivid than just tapping your card.
This tip goes hand in hand with the following…
Create a Budget
Why not create a cash budget for, let’s say, a week and see how far will this get you?
Creating a budget is the most basic, simple and important financial advice anyone can give you.
If you ask anyone, they will tell you that they probably don’t need one. However, they are probably the ones that end up surprised when they see their bank account balances are so low at the end of the month.
Once you’ve tracked your spending for a month (or a week), create a simple budget by adding up all of your expenditures. Don’t forget to add a certain amount for savings as well.
These days there are plenty of useful applications you can easily download on your mobile device and receive further assistance in analysing your spending habits and creating a budget.
No more impulse purchasing
You can’t avoid impulse purchases, we’re all guilty of making them. Whether you passed through a clothing store and saw a cool shirt you couldn’t resist buying or you were browsing through Amazon and accidentally saw something in the “suggested” section you thought was interesting, we’ve all done it and there’s no way of avoiding it.
However, you have to remember that that’s the goal of all those companies; to try to sell you items that you’ve never even considered buying in the first place.
What we suggest to avoid impulsive spending is simply wait for a while before making the purchase. Think if you really need it or can afford it. If you really want to have this particular item, tell yourself that you will buy it in a few days. This will give you some time to re-think your priorities. You will find that you probably lost interest in the item or completely forgot about it.
Work on your patience
The concept of practicing patience sounds quite simple, yet so many people fail to be patient and act on their impulses. Have you ever heard of buying fever? That’s when you get really excited about a product and you buy it before even checking the price or consider if you even need it. This initial excitement over, let’s say, a pair of shoes or a nice watch shouldn’t be the driving force of your purchasing decisions. Give yourself some time, at least 24 hours before purchasing it. Sleep on it. This will help you make a more rational choice.
Practice gratitude
Take a moment to acknowledge everything good you have in life. You may feel stressed and think that you deserve more, however, the reality is that there are people out there who have it so much worse than you.
Remind yourself of all the good and stable things you can enjoy and often take for granted. You have a stable job, good apartment, a roof over your head, food, water, friends and family that can help you and way more than other people have in their lives.
If you can truly feel grateful for all the things you have in your life, you might end up realising how little you actually need.
Invest in trading
For our last tip for quitting bad money habits, we wanted to suggest something that might intrigue you and in a way help you if you need an additional income to afford the lifestyle you are striving for.
Once you’ve managed to pull your finances together and learn how to spend reasonably and save money, think about forex trading. Instead of buying objects which you will forget about in a few months, why not invest in yourself and your skills?
Why not learn how to become a successful forex trader and join the most liquid market in the world?
Instead of browsing through the online shops all day long and wondering what to buy, why not develop your skills as a trader and earn money instead of spending it recklessly?
We, at Trading Education, are dedicated to helping people with a vision and a passion to learn and progress in the art of trading. Therefore, we are giving our forex trading course, “The Ultimate Guide to Forex Trading”, for free to anyone who wants to become a trader and make a career out of it.
We are offering it thanks to our partner brokers who want to see educated and intelligent traders who stick around and take advantage of the market.
In our course, you will learn:
- Foundation in FOREX Trading
- Mechanics of FOREX Trading
- Advanced Analysis FOREX Trading
- Strategy Trading for FOREX Trading
To get more information on how to receive our free trading course, contact us at any time at [email protected].
Final Thoughts:
Throughout this article we’ve talked about bad money habits and how poor spending can cause a huge burden on your finances and leave you in a highly uncomfortable position.
Using the tips for quitting bad money habits we listed above is a great way to get started. By improving your financial stability you can start looking at the bigger picture and think of more reasonable and beneficial ways in which you can invest your time and money. One such way is becoming a forex trader. Remember, success is one decision away!
At Trading Education we want to help and guide you so that you can be able to make the most of your money. A great way to do that can be to make sure you're not falling into bad money habits. Money saved can become money to invest.
If you enjoyed reading this article from Trading Education, please give it a like and share it with anyone else you think it may be of interest too.