How To Change Spending Habits

How To Change Spending Habits

Do you want to know how to change spending habits so you can stop your bad spending habits?

Do you want to discover helpful tips on how to spend money wisely, either in business or life generally?

Are you looking forward to learning how to save more money by changing your spending habits?

The kind of spending habits you have can significantly affect your finances, either in business or life generally.

Good spending habits will have a positive effect on your finances and life in general.

Likewise, bad spending habits would negatively impact your finances and life generally.

Based on this, you need to examine your spending habits and change them accordingly.

Read on to find out how to change spending habits.

How To Change Spending Habits

How to Create Better Spending Habits

Before we discuss how to change spending habits; let’s try to understand the concept of “spending habits” properly.

Hence, let’s discuss the following;

  • Understanding spending habits
  • Good spending habits
  • Bad spending habits

Understanding Spending Habits

So what are spending habits?

To understand this we’ll need to understand what are habits.

Dictionary.com defines a habit as an acquired behavior pattern regularly followed until it has become almost involuntary.

Based on this definition, your spending habit is an acquired and involuntary behavior pattern you regularly follow with regards to your finances.

This means that your spending habit is something you can’t help doing because it has become a necessary part of you.

Now that you understand what spending habits are, you might begin to wonder how are spending habits formed?

Let’s find out.

How to Build Good Spending Habits

How Are Spending Habits Formed?

You might begin to wonder how do people pick up /develop spending habits.

We pick up habits/spending habits due to the events/circumstances/situations around us.

This is because we are largely influenced by the things around us.

Hence, you form spending habits due to the influence of your immediate environment or circumstances around you.

Here are some of the factors that influence and form the spending habits of most people.

  • Parents/family/relatives and friends
  • Media
  • Life experiences
  • Religion/spiritual beliefs
  • Cultural norms and values
  • Lifestyle
  • Income
  • Economic factors (such as recession, economic boom, etc)

Just as there are good and bad habits, there are also good and bad spending habits.

As said earlier on, good spending habits will impact your life positively and vice versa.

More so, before you consider changing your spending habits you need to know what your money habits are.

Are they good or bad money habits?

Let’s find out what makes good and bad money habits.

How to Break the Spending Habit

Good Money Habits

Here are some examples of good money habits.

  • Saving money
  • Planning your expenses.
  • Having separate accounts (savings and expenses account).
  • Saving up bonuses/profits
  • Having contingency plans
  • Tracking your expenses
  • Creating a financial budget
  • Setting financial goals
  • Creating multiple streams of income
  • Investing 

Spending Habits We All Need to Break

Bad Money Habits

Here are some of the things that make up bad money habits.

  • Impulsive buying
  • Gambling.
  • Acquiring debts.
  • Overspending
  • Having no financial budget.
  • Living above your income.
  • Extravagant buying.
  • Having no savings
  • Buying what you want not what you need.

Now you understand the concept of spending habits and what makes good and bad money habits let’s discover how to change spending habits.

How To Change Spending Habits – Breaking Bad Spending Habits And Creating Good Spending Habits

Tips to Cultivate Good Spending Habits

Let’s examine how to change spending habits by breaking bad spending habits and creating new ones.

These are tips on new habits that you can form to change your bad spending habits.

1Identify Your Spending Triggers And Cut Them Out

If you want to successfully change your spending habit you’ll need to identify what triggers your bad spending habits.

What are the things that cause you to spend more money than you ought to?

Is it a TV series that you’re obsessed with, social media, an extravagant friend, your love for fashion, your environment, your cravings, or what? 

Identify what your spending triggers are.

This would help you come up with effective ways to cut them off.

Consequently, helping you manage or eliminate the temptation or opportunity to spend more than necessary.

Thus, helping you change your spending habits.

2Realize How Your Current Spending Habit Makes You Feel And Be Willing To Change

Good Financial Habits

Until you realize how your spending habits make you feel it would be quite difficult for you to want to change.

Hence, to change your bad spending habits identify how your spending habits make you feel.

How do you feel when you, gamble, overspend or do impulsive buying?

When you overspend or gamble, do you feel like you’ve wasted money that could bring more value to you if you invested it somewhere else?

After realizing that your bad spending habits are affecting you negatively and making you feel bad about yourself, it would become quite easier to change.

This would give you the willingness to change.

The willingness to change is a very important factor for making any valuable change in all fields of life.

Yes, bad habits are hard to break.

However, with the willingness to change comes the readiness to take action.

Once, you develop the willingness to change your spending habits, you’ll also be willing to put certain measures in place to curb your spending habits.

Thereby helping you change your spending habits.

Hence, to effectively change your spending habits, realize how they make you feel and be willing to change.

3Have A Strong Reason To Spend Wisely 

This another effective step to take that can help you change your spending habits.

Setting financial targets and goals that you want to achieve is a great way to curb your spending habits.

When you set such goals and you’re serious about achieving them you’ll become more frugal with your spending.

For example, if you set a savings target that you want to reach over the next few months or years, you’ll be more conscious about how you spend money.

This is so you can reach your target or your goals.

Hence, to change your spending habits, give yourself a strong reason to spend wisely by setting financial goals.

There are many ways to do this.

You could write down your goals or you could consider using financial planning apps.

Always have these goals in mind whenever you’re spending money.

This would help you resist the urge to spend in a way that might jeopardize your goals.

4Limit The Use Of Credit Cards

Another thing you need to know about changing spending habits is how you use your credit cards.

Credits cards create more convenience for you to spend money at will.

With credit cards, it’s easy to just swipe and pay for whatever you want and whenever you want.

In other words, there’s a high chance of overspending when you use credit cards.

This can be a little bit of a disadvantage to you if you’re thinking of spending less.

So, if you want to change your spending habits you’ll need to limit your use of credit cards.

Make it a habit to use your credit cards for emergencies only.

If possible keep your credit cards at home and use cash only.

This is so that when the urge to spend money on something you want comes it would be easy to resist it because you have limited cash at hand.

Thereby helping you change your spending habits.

5Live By The Principle Of Needs Over Wants

Develop healthy spending habits

This is another important tip to keep in mind if you want to effectively change your spending habits.

For you to become a better spender and develop good spending habits you need to distinguish your needs from your wants.

What are your needs?

What are your wants?

Your needs consist of anything essential to you ( that is things that are important for living such as food items, groceries, education, healthcare, etc)

On the other hand, your wants are the fine things of life that you want that such as cars, new shoes, hair extensions, etc)

In simple terms, needs are the necessary things to have while wants are the good things to have.

Most times people, people who overspend spend money on wants rather than needs.

Just as they say in economics human wants are insatiable.

You’ll also keep wanting more (more shoes, more clothes, more bags, more gadgets, etc).

So, it’s best to always satisfy your needs rather than your wants.

Hence, if you want to effectively change your spending habits by learning to spend less, live by the principle of needs over wants.

Keep this in mind when next you go shopping or are about to make a purchase.

Ask yourself do I need this or do I want this?

6Live On a Budget

tips to create good habits

When it comes to changing bad spending habits, living on a budget is a very important point to consider.

Have a budget for your finances.

Plan your expenses and how much you’ll be spending on what item.

This would help you manage your finances and spend money on important things.

More so, be strict about the budget and stick to your budget.

For example, if you plan your expenses and you budget a certain amount of money for buying groceries or something nice for yourself make sure you stick to it.

By this, there’ll be no room for unplanned buying except in extreme cases of emergencies or circumstances beyond control.

Hence, to effectively change your spending habits live on a budget.

Have a spending/expenses budget or allowance and stick to it.

7Know Your Priorities (Spending Priorities)

Ways to Foster Healthy Spending Habits

This is another important tip to keep in mind when thinking of changing your spending habits.

Knowing what’s important to you can greatly influence how you spend money.

Earlier on, we made mention of certain economic terms such as “needs” and “wants”.

We stated that its important to go after what you need before considering your wants.

Now another important economic term that can help you curb your spending habits is “scale of preference”.

By the scale of preference, we mean (on a scale of 1 to 10 ) the order in which things are important to you.

In other words, if you were to write down your needs on a piece of paper which would come first, which would come second etc.

The process of putting your needs down in their order of importance to you is known as arranging your needs according to your scale of preference.

It’s the process of identifying your priorities.

For example, between getting a degree and buying a house which is more important to you in the current scheme of things.

This would help you prioritize what you spend money on.

In other words, you’ll only spend money on things that are very important to you at the moment.

Hence, if you want to change your spending habits, consider prioritizing your needs.

This would help you spend less on things that you don’t need at the moment.

8Do More Planned Buying (Avoid Impulsive Buying)

Understanding and Changing Spending Habits

Another bad spending habit that most people have is buying on impulse that is buying things they didn’t plan to buy.

There’s a difference between buying something you didn’t plan to buy due to emergencies and buying something you didn’t plan for just to satisfy your wants.

To change your bad spending habits of impulsive buying, form a habit of always having a shopping list.

Each time you go out to get something, plan, and create a shopping list.

If it’s not on the list then you don’t need it.

Hence, there’s no need to get it.

This will help you do more controlled buying and help you resist the temptation of impulsive buying.

Thus helping you spend less on things you don’t need and changing your spending habits.

9Always Ask Yourself Why Before Any Purchase

Bad Spending Habits And How To Break Them

This is another important principle to live by that can change your spending habits.

Just as we discussed earlier to do more planned buying and avoid impulsive buying, you should also do some self-assessment before any purchase.

Before buying that new pair of shoes, take a pause to ask yourself, why am I buying this pair shoe?

Is it because the old one is worn out?

Am I buying it to keep up with the trends in fashion?

If you can’t find out a genuine reason or purpose for purchasing that item, then you probably don’t need it at least not at that moment.

Hence, you don’t need to buy it.

Bear in mind that this self-assessment would only be effective if you’re honest with yourself.

Hence, you need form a habit of asking yourself why before any purchase and honestly answer the question(s)

This would help you avoid buying things you don’t need.

Consequently, helping you avoid overspending.

Thus helping you change your spending habits.

10Have An Accountability Partner

effective financial habits to adopt

Having an accountability partner for how you spend your money and what you spend your money is a great way to curb and change spending habits.

This could be your spouse, partner, close friend, family, or even an expert financial adviser.

Just as we need support when trying to achieve any goal, we also need support when trying to achieve your financial goals and changing your spending habits.

Hence, have someone who can help you make important financial decisions and support you to achieve your financial goals.

Have someone who can question your spending habits and also support you to stop your bad spending habits.

More so, you can have an accountability partner in the form of a shopping buddy.

This shopping buddy would serve as a voice of reasoning each time you’re tempted to overspend or do impulsive buying.

Thus helping you to be more conscious about how you spend money and the things you spend money on.

Hence, to change your spending habits, Have an accountability partner that motivates and encourages you to be more prudent with your spending.

Final Thoughts On How To Change Spending Habits

How to stop spending money

As earlier stated bad spending habits can greatly affect the quality of your life.

For example, as a business owner, you need to be wise about how you spend money in your business otherwise it could lead to business failure.

More so, as a regular individual, your spending habits can either lead to your financial success or financial crisis.

A bad spending habit could lead to you acquire unnecessary debts.

Hence, making it difficult for you to achieve a life of financial freedom.

Based on this, you should constantly examine your spending habits and make adjustments where necessary.

Hence, apply these tips to help you change your spending habits.

Bear in mind that changing habits requires time, patience, and practice.

So, don’t feel bad about yourself when you find yourself falling back to your old spending habits.

Just keep trying and ensure you have the right people around you to support you and help you achieve your goals.

Here’s to your success.

How has your bad spending habits affected your life or business?

Please share your thoughts with us in the comment section below.

We are always thrilled to hear from you.

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How To Change Spending Habits