Your bad financial habits have you in a chokehold and are dragging you away from financial freedom. Let’s fix them before you get dragged any further. Your financial health should be a priority. You can’t expect to do whatever you want and have perfectly healthy finances. It would be delusional to think that having 40 McNuggets, 2 Big Macs and a vanilla shake everyday will yield you immortality. I haven’t tried it though, maybe it does work.
Regardless, my point remains that you need to be mindful of your financial health just as much as your physical health. It requires a certain amount of effort, but it’s well worth it just like working out or cooking healthy meals.
So how exactly do we take our bad, stinky, no-good, unhealthy financial habits and turn them into glorious, wonderful, award-winning, healthy financial habits? By first taking small baby steps.
What are Bad Financial Habits?
Just to cover all our bases here, let’s go over the don’ts. Hopefully you know what is or isn’t a bad financial habit, but we don’t all have someone to teach us these things. I had to learn a lot for myself.
Simply put, spending more money than you make and living above your means is bad. Having a ton of high interest debt is bad (even worse if you’re not doing anything to pay it off). Not having money saved in an emergency fund is bad. Not investing in your retirement is bad (do you want to spend your golden years working?).
I don’t think so (I certainly don’t want that for myself). As we get older, our bad habits tend to compound and create a worse situation that’s harder to escape. The quicker you recognize you need to change and correct your bad financial habits, the quicker you’ll be financially stable.
One thing I want to emphasize is that having a bad financial situation doesn’t make you a bad person; it just means you’re bad with money. There are so many reasons that we might develop bad financial habits. Maybe we inherited them from our parents or we were never taught how to manage on our own. Maybe we have underlying mental health struggles that get in the way or we cope with issues by spending money.
Whatever the reason, it’s important to address your bad habits and fix them so you don’t end up in an even deeper hole.
How to Turn Bad Financial Habits Into Healthy Ones
First you have to identify what your bad financial habits are. We all have different areas that are weaker than others. For me, I really had to get my spending on food under control. In college, I ate out a lot and it wasn’t for lack of a kitchen, I was just lazy. I also made poor decisions when it came to buying a car that set me back financially.
So what are your bad financial habits? Are you an online shopping fiend? Addicted to fast food or eating out like I was? Maybe you’re too generous and give away money or spend financial resources on people close to you while neglecting your own needs. Whatever your vices are, write them down. Being self-aware allows you to recognize your behavioral patterns and you’ll be more likely to check yourself before you financially wreck yourself.
Next, clearly define your financial goals and boundaries. It’s okay if you don’t know exactly what your financial goals are. Maybe you want to pay off debt, save up an emergency fund, buy a car, etc. Once you have your goals figured out, you should ensure they are quantifiable and achievable within a given timeframe. How much is the car you want to buy and how long will it take you to save up the money to afford it?
Your financial boundaries are relevant to both the bad financial habits you’re trying to kick and the financial goals you’re trying to achieve. If one habit you’d like to destroy is online shopping, an appropriate financial boundary might be deleting shopping apps from your phone. Your financial boundaries will support your progress as you turn your bad financial habits into healthy ones.
In order to make those changes, make clear swaps. Anytime you feel like buying something off Amazon, transfer the money to your savings or invest it instead. Buy groceries and meal plan so you actually use them instead of going out to eat. Make a budget and a plan for your money so you actually know where it goes instead of being baffled that your bank account is empty.
Making Sure Your Habits Stay Healthy
Like with any habits, the more you do them, the more likely they are to become second nature. Prioritize your financial health by working on intentionally building better financial habits. I’ve been able to maintain my healthy financial habits for a couple of reasons.
The first is that I actually enjoy personal finance and budgeting. That’s why I’ve made this blog – to share my passion and help others who may not get as excited as I do about numbers. The second is that I know that what I’m doing will benefit me greatly in the future. I’m playing the long game now in my early 20s so that I can be financially free the rest of my life.
You don’t have to be “young” to start changing your bad financial habits. No matter how old you are, time will pass anyway, so you might as well do something with it. Keeping your financial goals at the forefront of your mission will help you stay on the right track. Other ways to help hold yourself accountable are journaling, blogging (like me), having someone by your side to encourage you, or even creating a vision board of what your life will look like if you stick to healthy financial habits.
Don’t get discouraged if you have setbacks, either. We’re human and they happen. The important thing is that you get right back to it and keep making progress. We often learn a lot from our mistakes even if it hurts us to make them. Remember that you’re more than capable of doing hard things. If you can survive a tummy ache, you can maintain healthy financial habits. You are God’s strongest soldier, after all.