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Spending means paying money for things and experiences. Habits are regular practices often hard to give up or change.

We often make purchase decisions without paying much attention to the thoughts that run through our minds. Spending can be a response to marketing messages or some psychological need for control.

Spending habits begin early and influenced by how family and friends handle their own finances. How your parents handled money and the spending habits of your friends can influence your spending on a subconscious level.

Take a sheet of paper and divide it into two columns and list your spending habits into two categories: Good and Bad.

List the good and bad money habits

Be as specific as possible. Don’t make any judgments as you list your habits.

Good habits may be saving for an emergency fund, paying off credit card balances in full each month, carrying no debt, or paying off bills on time each month.

Bad habits may include borrowing money from family or friends, keeping credit cards up to the limit, or eating out every night.

Determine the emotion behind the spending

Figure out what is causing the bad habits to continue and the level of influence it has on the quality of your life. Take time to really asses the reasons behind the habits.

  1. On a separate sheet of paper write down the conditions that cause you to continue the bad money habits and how often do the habits cause grief.
  2. Determine what you can do to change. Write down ideas.
  3. Create a plan or process to stop the habit.

Answer these questions: do you spend money as a form of retail therapy? do you feel down so you go shopping? are you socially spending to keep up with your friends and overspending on goods to make you fit in?

If the answer is yes to one or all of these, then ask yourself what can you do to be more aware of when these spending habits come up. Could you ask yourself, “Do I really need to make this purchase today?” A simple questioning of the purchase may be the break you need to keep you from spending unconsciously.

Habits form easily but can be a challenge to change

Every day we are faced with hundreds of choices, and it is impossible to consciously think about all of them. Spending habits are easy to get into, but they are not always beneficial. Financial situations often change and what once was affordable may no longer be affordable or perhaps it never was in the first place.

When you’ve figured out your spending habits, you can strengthen your good habits with rewards. You can also create a plan to break bad spending habits by making small adjustments in how you use your time, how you surf the internet and what emails you receive that may cause you to impulse buy.

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