One of the main problems most people have with planning their finances is kicking all the bad financial habits that they’ve built up over the years. Even if you’re not in any financial difficulty, odds are you have at least one or two bad financial habits that you’d be better off without, and learning how to overcome them is important – especially in the long term.
While there are many different money lessons and financial advice tidbits that could help, to really go after your bad financial habits it would be a good idea to take it step by step:
Identify your bad financial habits
As with any problem, the first step to dealing with it is to identify what exactly ‘it’ is. When it comes to bad financial habits these are normally fairly easy to pinpoint however, and essentially consists of anything and everything that could be causing you to deviate from your plan, overspend, or spend unnecessarily. It is important to note that spending extra for the sake of convenience is not necessarily a bad thing – since it will mean that you save time, and time is money.
Plan out finances thoroughly
If you don’t already have a financial plan – start one, and be as thorough as possible. Many of the common ‘bad habits’ that people have are difficult to break, but it is easier to do so if you can ‘see’ the benefits that you get by breaking them. For example, by avoiding splurging every time there’s a sale on items you really don’t need – you could estimate how much more you could save and how that would add up over the course of a year.
Take small steps
Trying to tackle everything at once may not work out for you – in which case it may help to take small steps. Try to consciously eliminate one bad financial habit a week and slowly you’ll get used to the process and be able to tackle each habit one by one.
Throughout the process, it is important to keep your eye on the prize: Being in a stronger financial position. Depending on your initial circumstances you may find that certain measures could help you to get there sooner, such as bill consolidation loans, and if so you should definitely look into them and include them as part of your financial plan.