Breaking Poor Financial Patterns – The top 5 worst offenders
We all have bad habits, especially when it comes to finances. Any one who thinks that they don’t most likely hasn’t looked at him/herself enough. I’m no exception to the rule, I have often found myself making excuses to cover poor planning skills or lack of organization (I forgot about that! I don’t have a working vehicle, how could I get there in time! Etc.)
This article is going to cover five of the worst financial patterns that are out there, and encourage you by providing ways to break them! Just because you have bad habits now is no reason you have to live with them the rest of your life.
Pattern #1: Paying for the luxury of lateness
Late fees are the chief of the collection of avoidable costs, and they’re something that most people have no actual desire to pay. Think about it, why would you want to give some one not only the original money you promised, but an extra ‘bonus’ just so that you can forget about it and pay later in the same week? Almost without exception, this is a completely unnecessary cost, one that really adds up over time.
So how do you stop paying late fees? Pay on time. Every month. We all have our calendars, mark bill due dates on yours! Set reminders if writing it down isn’t enough, or pay bills as you see them come in the mail (in which case be sure to check your mail!).
This is one pattern that can cost you a lot of money, so break it now!
Pattern #2: Not planning for savings
I can’t count the number of times I’ve heard “I wish I could save like that!” from one client to another. People often try to convince themselves that they’re “just not a saver”, and that that’s the reason their savings account still doesn’t exist. The truth is though? We need to be harder on ourselves, most of us could be saving right now. Barring some extreme lack of income and struggle with poverty, most of us could put away a mint of money – even as we’re currently spending!
Consider some of the following methods for breaking this viciously deceptive pattern of thinking:
Method 1 – Save first, spend later.
Most banks have recognized this spending pattern in people, and have tried to compensate by offering people an option of automatic deductions from their bank accounts on payday. This is an utterly simple way of piling money away from yourself, and starting a savings account.
Method 2 – The all famous envelope.
For people who really struggle with the concept of keeping money away from themselves, consider purchasing some envelopes. Carefully label each one, ‘living expenses’ ‘food expenses’ ‘monthly bills’ and ‘savings’. Each time you get paid, cash the money, and distribute it amongst the envelopes. This is a great way to stay organized, and to watch your savings grow – literally!
Pattern #3 Spending until there’s nothing left
We’ve all had that moment where we realized we’ve already spent our entire paycheque and the week isn’t even up. This is a bad habit, and one that can be avoided.
The main way to stop this kind of spending is to look at the thinking behind it. Where is the money going? Could you save money by bagging a lunch instead of buying one? Could you take a bubble bath instead of indulging in retail therapy? Can you really afford to constantly be spending like this?
By forcing yourself to examine your spending habits, you’ll be a long way into convincing yourself they need to change, and by identifying elements that can put you at a greater risk (perhaps a stressful day or shopping while hungry).
Pattern #4 Giving, giving, and giving some more
People love to be the giver in the group. Every one feels like a hero when they pick up the tab for drinks, or invite every one out to dinner. While these are decent ways of connecting with friends, they’re also extremely fast ways of overspending and wasting money.
To break this pattern, look at the real goal here – being social, or possibly thoughtful. These are great things to do – that don’t have to cost a fortune! Think about what talents you may have to make a gift instead of buying one, host a games night instead of going out for dinner, and watch a movie at home instead of heading to the theatre. These events all allow for being social and generous, without breaking the bank.
Pattern #5 Stop procrastinating
This is a terrible financial pattern that many of us have. I’ve tried to excuse it by fondly imagining procrastination as a personality trait (ever heard ‘I’m a procrastinator’? That’s the excuse), but the reality of it is is that financial procrastinating is entirely bad habit – not at all personality.
The best way to break this destructive pattern of spending and thinking is to force yourself to complete a task exactly when you think of it. This can be done until the procrastinating stops. Pay your bill today. Call your creditor right now. End the pattern of procrastination!
Incidentally, many of these habits not only save you money, but also save time! Try some of them out and see what a difference they make today!