Have you ever had to say I’m Broke? Well if you have this is for you. You’ve got money problems and you can’t figure how to crawl out of the hole you’ve dug for yourself. The bills keep stacking up and try as you might to pay things off, your bank account is going further and further in the red with each passing day. You just cannot seem to find a way to pay your bills. What can you do to kick your bad money habits once and for all? Hire a company to consolidate your debt into one easy payment? Go on a spending detox?
Although each solution provides positive outcomes, you need to build a better relationship with your finances not just bandage the crack in your piggy bank.
Here are some tips that will help you kick your bad money habits once and for all:
- Stop treating money like an enemy. If you see money as a means to an end, you’ll never be prosperous. You are exchanging your precious time on this planet for a paycheck. Equate every minute worked with one that you’ll never get back. If that doesn’t change your perspective nothing will. If you’re tired of toiling, stop wasting your time and money.
- Start saving something each paycheck. Determine how much money you can reasonably save in a month and have it automatically deducted from your account each pay period. A popular savings plan involves saving $1 dollar the first week, $2 the second week, $3 the third week for a grand total of $1378 in 52 weeks. If you can’t see yourself saving that amount, try for at least half that amount. Anyone can do it if they’re diligent enough at finding ways to save money.
- Know exactly what you’re paying for. Become an informed consumer. Know which fees you’re being charged and why. Stop carelessly paying your bills and scrutinize your statements. Call the company that is providing service to you and ask why you’re being charged for certain items.
- Quit buying expensive software. There are plenty of free programs to choose from. For example, use OpenOffice for documents and spreadsheets.
- Stop being so lavish with your entertainment budget. Borrow books from the library or download free ebooks online. Rent a Redbox movie versus buying one. Host a clothing swap at your home. Take advantage of the free events going on in your city. Even the smallest communities have festivals, concerts in the park, and museum days.
- Buy a filtration system and kick your bottled water habit. If you insist on “purified” water, purchase a filtration water pitcher or attachment for your tap. You’ll save a bundle and reduce the amount of plastic you buy.
There are plenty of ways you can break your bad money habits. Strive to make small changes and before you know it, you’ll notice a big difference in how you handle your finances. You’ll have less debt and more savings. You’ll be better prepared for emergencies. You’ll stop depending so much on your job and appreciate the little things once again. That’s what kicking a bad money habit does for you.
Charissa is into frugal living and saving money.
the entertainment budget is where I see many people struggle. The YOLOs ,the "I have been so good with my money I deserve a treat" and people who have to spend money to feel good. One of my broke reader recently took her mom to an expensive restaurant for Mother's day. I tried to explain to her that it was a nice gesture but it would have made her mom just as happy to spend time together without spending money.
Can't agree more with being an informed consumer! I always comparison shop before I make major purchases. I recently bought a new home and decided to go with a Brita Water Pitcher instead of shelling out hundreds on a water filtration system.
Excellent tips! Plug all those money leaks (paying for water is a great example!) and paying for services that should be free (no reason in the world to pay to take *your* money out of an ATM *if* you take the time to choose the right bank). As you rightly point out, these small changes add up.
You cannot change your habits overnight. Starting small is the way to go. Start saving something, anything, just a dollar like you recommend is the way to go. Number 5 is a good tip, I saved over $100 when my teen wanted to buy 9 books of her favorite author at the bookstore by borrowing them from the library instead.
I think that equating money you spend with time you spent to earn it is a great lesson. Too few people think of money (or debt) in terms of actual time and energy.
Yes! GReat tips! Actually, I just drink water from the tap! If you get in the habit of smart spending, diligent saving and investing it gets really easy to amass wealth.
While many people focus in saving, which is very important, I think that people also need to focus on not spending. What I mean by this is that you need to be more careful with your purchase decisions. Don't waste money on things you don't need. When you do this, it will become easier to save and then you will have some extra money to invest in things like stocks to make your money work for you.
This is my first visit to your site - I really like your idea of saving a $1 one week, then $2 the next...until you have the $1378 in fifty-two weeks. I think I might try it!
Great tips. I try to make it a point to save 20% of my income. But most of the time I exceed the limit. Got to start cultivating better money habits!
Great tips. I guess I haven't been cultivating good money habits though I try to make it a point to save 20% of my income. Most of the time I've exceeded the limit.
Good stuff! Also setting up an automatic deposit into your savings account from each paycheck is a relatively painless way to accumulate an emergency fund. If you don't see it, you won't miss it! Just talk to the payroll department where you work & they will take care of the details.
I am helping a reader who is always broke, but the main problem seems to be unrealistic expectations. If you are broke, saving $5 is better than being broke. You can't hope you will have thousands in savings by next month, or you will just lose any motivation when you see you don't.
One of the best pieces of financial advice I ever heard was to pay yourself for at least the first hour you work everyday. This was talking specifically about retirement, but I'd argue that it can go for general savings, too. Every other hour you work, you're working to pay someone else, so make sure to pay yourself for at least a small fraction of that precious time you're putting in. Great article.
Some great tips. #1 is really important, perhaps more than people even realize. People have such a love/hate relationship with money. They need to stop viewing "money" as being bad or the miracle that will bring them happiness. It's not money that does that - it's how you chose to use it that gives you joy or fills you with regret/guilt, etc. Getting a balanced relationship with money can be instrumental in eliminating bad money habits. And yes, saving even a small amount can help you feel more in control.
"Equate every minute worked with one that you’ll never get back. If that doesn’t change your perspective nothing will." This is so true! When I hear people complain about how much they hate their job and then conclude "it's all about what it affords me, I guess" I cringe. Spending your days hating your job is no way to live life!
Great stuff here, Charissa. We've saved a TON of money since we stopped being so lavish with our entertainment monies. Groceries, too, is another area where people can really cut down on spending if they try.
Saving something as opposed to saving nothing is a powerful tip. Getting started is always the hardest part!
Great tips. I would also add that facing what the real problem is will help- be it setting up a budget/dealing with debt...taking control of your money is freeing.
These are great tips. Saving money each paycheck and know exactly what you're paying for are awesome things to do. I think that tracking all of your expenses can help point out the areas where you can cut back.
These are all great tips, though I think the saving option as well as knowing what you're paying for are likely the first ones I would start with.
I used to think that money is my enemy but I've learned that it is not. It is my friend and I should learn to treat it well. And even though I used to have tons of debt, I tried to save money, no matter how small, from my paycheck and learned how to prioritize. It really pays up in the end.
I love your first point ~ stop treating money as the enemy. Getting clear on what you value and then spending your hard-earned dollars on only those things you value goes a long way to building wealth and seeing money as a tool that brings choice. When you have money problems, you have very few choices. When you are debt free with money in the bank, you begin to have a lot of choices...then money becomes your ally!
I'm forever trying to revise my money habits. I'm actually really good, I don't have expensive habits, but I think it's always good to change this up so things don't become a habit!