How to Break Bad Spending Habits

Are you guilty of overspending? Statistics show that most Canadians feel like they’ve lost control of their finances, and this problem stems from bad spending habits. Impulse buying can be a hard cycle to break, and money management is far from an easy skill to acquire.

A recent study found that Canadians are notorious for overspending on food, clothing and lottery tickets. Although these things may seem harmless in small doses, they quickly add up. If you want to break free of constantly overspending, here are three tips to get you started:

1) Use cash, not credit

Using credit or debit when making a transaction is easy and quick, but it could be the root of your overspending. Using credit to pay for small ticket items could mean unnecessary spikes in your interest rates and fees, which could impact how well you’re keeping your budget on track. By using cash as your primary payment option, you’ll be able to physically see how much money you’re spending at the check-out, and less likely to overuse your credit cards.

If you already keep cash on-hand, be wary of using your credit with money in your pocket – this is a subconscious mind trick, and it could be making you spend more than you have.

2) Make goals

Your goals don’t have to be extensive, but they should be realistic. Whether it be cutting down on buying coffee, or sacrificing a night out, writing down what you wish to achieve will help you stay organized financially. As well, it will help you visualize a budget and stick to it. Think of it like calorie counting – you know your triggers, so make goals to prevent falling astray from your plan.

Controlling your money starts with dedication to your goals, and through some minor sacrifices and lot of ambition, you’ll see personal success when it comes to will-power and money saving.

3) Don't ignore your bills

Often, less-than-rational money spending decisions can leave us face-to-face with those monthly bills that are painless to look at (not to mention, seemingly impossible to pay off). However, the instinct of “dealing with it later” is the worst thing that you can do.

How you borrow and spend money is extremely important when it comes to maintaining a good credit score, and building a solid financial future starts with learning how to manage your spending. Through your goal-making process, write down how much you owe to creditors, and make sure it’s a part of your monthly budget. Otherwise, your saved money could be used for paying fees… and that’s not where you want your hard-earned cash going.

Handling money isn’t a skill that we are taught in school – it’s something that we learn the hard way throughout adulthood. Impulses trigger human behavior, and they can sabotage your financial decisions. The initiative to save money begins with breaking your bad spending habits, and although this process starts with small steps, you’ll be guaranteed less debt and more savings over time.