How to Break Bad Spending Habits with These Top Tips

With the festive season only just around the corner complete with holidays, celebrations and New Year’s resolutions, now is the best time start breaking any bad spending habits. And let’s face it – we all have a few! It’s estimated that nearly half of Australian’s will make a New Year’s resolution to save more money, making it one of the top goals along with health, fitness and wellbeing.

And whilst most New Year’s resolutions are rarely kept – almost 75% to be exact – budgeting goals are some of the smartest, most rewarding ones you can make. Making financial resolutions come down to saving money, spending less and paying off debts; but all these goals mean nothing if you can’t break the initial habit and urge to blow your budget.

The key to successfully saving money doesn’t lay within tight budgets and the best intentions; it’s actually about changing your spending habits and breaking the bad ones. You want it to be easy and automatic to really stick to it. So how do you make your bank balance look a little healthier each month? Here’s a few top tips to break those bad spending habits:

1. Recognise Your Triggers

Before you can begin changing your spending habits you need to accept there’s going to be your own personal triggers to face. The first step to beating them is to recognise what they are. Perhaps you splurge out at the shops when you have a bad week or you have a serious obsession with shoes (c’mon ladies, own up!). Maybe you’re a sucker for that morning coffee at the local café or you opt for takeaways when the fridge is empty.

Once you understand your triggers, you can formulate a plan to avoid those spending habits. For example, if you have a tendency to spend after a bad week take up a healthier activity that can prevent it like a beach walk or an at-home movie night with your partner or best friend. If you’re constantly buying takeaway lunches at work, avoid heading to the shops on your break and prepare lunches the night before with dinner. Rather than completely cutting back from your ‘bad habit’, allow yourself to buy lunch once a week instead. If you know there’s absolutely no way you can go without your morning coffee, invest in a once off purchase coffee machine to make one before work instead of buying at the local café – you’ll be surprised at the difference replacing a bad habit with a good one can make.

2. Set Realistic Goals (and Reward Yourself!)

It doesn’t matter how motivated you are, no goal is ever going to be ticked off if you aren’t being realistic in the first place. Setting unrealistic goals is a recipe for failure. Don’t aim to save $5,000 a month if it means locking your wallet away and having nothing to look forward too! If you try and deprive yourself of too much, then you end up giving up and overspending or losing control.

Instead, start small. You don’t need to go cold turkey right away! Give yourself a spending allowance and create smaller and more realistic goals you know you’ll be able to achieve. Rewarding yourself when you keep or reach your goal is an important way to keep motivated too. Find a simple treat to keep you on track when you’re being tempted, whether it’s a small weekend getaway or a night in a hotel.

3. Leave Credit Cards at Home

Your credit card isn’t there to be permanently glued to you so get into the routine of leaving it at home when you do go shopping. In 2014, statistics show Australians went on a credit card binge spending a whopping total of $48.9 billion. If you are a credit card junky, resist the urge to always have it on you. Instead take only the money you need for the day - this will save spending more than your means on a regular basis.

Run a health check on your card provider every 6-12 months on comparison sites to make sure you have the best deal for your needs too.

4. Change How You Pay for Bills

The way you spend your money can be costing you a fortune. We live in a world where it’s easy to put everything on the credit card, but it’s not always a practical means of living. Change how you pay for your bills and the way you spend your money and it’ll be much easier to see where your money is going.

When you’re constantly swiping a credit or debit card, you fall into a pattern of not thinking – just swiping. Instead, keep an envelope of cash saved for your bills or create a separate account which ensure all your bills come out of it monthly. By separating your money for bills to your day-to-day dollars, you’ll be less likely to miss bills (resulting in spending more) and you’ll have a clearer understanding on how much you have left for YOU. Cash is tangible; so using it over cards promotes better spending conscious.

5. Use Shopping Lists to Keep You on Track

Mindlessly walking around the shops is notorious for us overspending. We forget what we really ‘need’ and instead purchase things that seem good at the time, only to find them still sitting in the back of your fridge or wardrobe months later. Go in with a plan – shopping lists will keep you on track with spending and steer you away from temptations.

6. Set Up Support Mechanisms

No matter how on track we seem to be, everyone can use a little support to reach their goals. Keep your friends and family in the loop about wanting to reduce how much you spend so they can help out with you experience an urge. By surrounding yourself with people who will applaud you when you are on track can make sticking to goals a whole lot easier too. 

There are only two ways to save money – make more or spend less. If you can do with some extra cash over the festive season, contact us today to apply for a short term cash loan with Ferratum Australia to see if you qualify. It’s easy, with flexible loan terms available which can help you have the loan paid off by the New Year.