6 Ways to Rid Yourself of Bad Money Habits in 2022
Whether you bite your nails, gamble at the weekend, or spend too much money – we all possess some bad habits in one way or another. As some of these habits may have a dire effect on your financial health, it is important to drop them ASAP. Here are 6 ways to get rid of these in 2022:
Bad Money Habits
Bad money habits – we all have or have had them throughout our lives. The classic and most infamous bah habit that first comes to mind is spending more than you earn and not having a budget. As quite a trivial concept, it really is the monster that grips most people. This then rolls into the use of credit cards and consumer debt, plus a myriad of other dark clouds than can stem from this basic premise being broken. Host Andrew Baxter says getting to the core of why someone is spending so much is critical, as it will often reveal holes in their personality.
Additionally – spending too much time on social media or listening to Finfluencers is a sure way to develop some terrible habits. The ‘click here to become a crypto billionaire’ ad on Facebook is certainly enticing and sold very well, albeit often leads to a false sense of hope and a lack of understanding when it comes to financial markets and personal finance as a whole.
Tip #1: Have a Budget
There is no exception to this, says hardened money veteran Andrew Baxter – you must have a budget. The problem with this philosophy is that most people view budgets as really not fun, punitive, or restrictive. The trick is not to view a budget as walls to imprison you, rather, as guidelines for you to follow to ensure you stay on track for what you want. Spending $500 a week at the track on the horses isn’t a bad thing – just as long as it is accounted for in your budget.
Tip #2: Don’t Chase the Wind
Chasing the wind is unattainable and unfortunately, many try to do this in their lives, and it has a disastrous effect on their finances. Social media, as Baxter exclaims, has a lot to answer for here. With your favourite influencer driving around in a G-Wagon and wearing a Louis Vuitton jacket can spur a lot of pressure on us as a society to keep up. So, what do you do? You spend money on stuff you really don’t need with the intention of impressing others. Our advice – stop chasing the wind and trying to keep up with Jones’.
Tip #3: Have a Game Plan
This may seem like an obvious one, albeit is quite a common philosophy that many forget about. Having a very structured approach to your finances is the only way to ensure you don’t indulge in any dark habits. Knowing what it is you are trying to achieve and then devising a distinct plan to get there is critical. Andrews Money and Investing Planner Journal is an awesome tool for this, check it out here: https://moneyandinvesting.com.au
Tip #4: Eliminate Bad Debt
Consumer debt like credit cards or personal loans we suggest getting rid of ASAP. As long as you have bad debt, someone else owns you. Not only are the interest rates on these facilities through the roof causing you to have less cash in the end, but they also encourage spending beyond ones means. If you can avoid using them in the first place this is great, however, if you find yourself stuck simply paying off the minimum repayments each money on your credit card – get this squared off in full as soon as you can. The same applies to buy now pay later debt, tax debt, and the rest of it.
Tip #5: Have a Money Date
Keeping an eye on things and checking in on your finances regularly is what we like to refer to as your money date. This means sitting down each and every month, going through the books and running the numbers on your account. The idea here, says Baxter, is to ensure that you aren’t deviating from your budget or game plan. Sometimes opening up the cupboard can reveal a few spiderwebs so getting it cleaned up on a regular basis can certainly help avoid this.
Tip #6: Don’t Create Obstacles
In life, we encounter obstacles all the time whom which stop us from continuing on the path we currently are. When it comes to money, many actually create these obstacles themselves. Telling yourself stories like – ‘I’ve never been good with money’ or ‘I always spend too much’ will mean you probably will continue to live out that narrative by default of your own philosophy. The opposite is also true. That positive biometric feedback loop is critical here as it will keep you in the game when the going gets tough.
Bonus Tip #7: Gameify Your Finances
Let’s face it – when something is fun, it’s much easier to keep doing it. As the bonus, 7th tip, host Andrew Baxter says to gameify your money. Make staying on budget enjoyable by keeping yourself accountable with a friend or family, make your money date enjoyable by throwing in a glass of wine and some chocolate – the possibilities are endless. Money doesn’t have to be mundane. It’s a tool that designed to help you get what you want; so, treat it as a game and like you’re the player in it. What level are you going to get to this time?