Financial Strategy

Breaking Bad Habits To Better Your Life

We’re addicted to our phones. You know as well as I do, its true. Walking and see someone who you don’t wish to speak with? Take out your phone. On Youtube, suddenly look at the time and see that its four hours since you last checked? Addiction. In fact, our brains actually respond to the flickering screens of phones and TV’s. When playing a game, we develop behavioral addictions to it each time we accomplish something, due to increased dopamine. 60 percent of the adults said they keep their cell phones next to them when they sleep.

Habits come in all shapes and sizes from cell phone addiction to drug abuse to (the one we’re focusing on) wasting money. Humans, especially young adults have the tendency to compulsively buy products. This is even more common spread in modern times, with Amazon One-Click or Apple Pay because of the ease of purchasing. You don’t even see the final price! I’ve noticed that many friends and associates suffer from this on varying scales, from buying trinkets to new technology. Many adults also see this, where as soon as they receive a paycheck they have a tendency to spend a large chunk of it on something they ‘want’.

Well here’s how to stop any bad habit. Set a goal. It’s an extremely simple thing to do, but many people seem to stray from it when trying to break a bad habit. Well, there are workarounds to this common problem that can easily be implemented. First, you need to plan on how to go achieving your goal. To do so, try to set a giant landmark goal, so let’s say if you want to stop being wasteful with your money, set the goal of having no outwards expenses for a full month (if possible. If not, then set the landmark goal of having no expenses on anything other then essentials, ie. bills, food…). That’s a very big goal to work to, especially if you spend your entire paycheck, as many teens do.

So to achieve this giant, monstrous goal, set smaller, mini goals. Try creating and writing down some if-then/if-instead statements, such as ‘if I want to buy coffee, then I will go home and get some’ or ‘if I usually buy lunch out, instead, I will make and bring lunch’. The act of creating these statements allow you to get into the mindset of ‘I will achieve my goal and break this habit’. Writing them down cements them in your brain.

If the habit you are trying to break is proven to have withdrawal effects like caffeine and nicotine do, or achieving your goal is proving extremely difficult, try a different approach. Try phasing the habit out, rather than axing it out. Say you can’t stop buying coffee’s each day. Figure out how many you buy per day (let’s assume 2). Rather than just stopping buying coffee all at once, try to cut down to one per day. Then stop buying on Tuesdays and Thursdays. Eventually phase it completely out. However, you need to do it on a schedule and keep track of your reductions numerically in writing. Research has shown that cutting it out ‘here and there’ never will lead to you removing the habit. You need a timeline, a small goal and a record of what you did. It helps if your peers such as friends and family know that you are trying to remove this habit from your life as they are a great source of motivation and will help you in any way possible.

Whatever method, you’re going to need some elbow grease and willpower.

Another way to stay on track of removing a bad habit from your life is replacing it with a new one. For me, I noticed that I had developed a habit of wasting money so I removed it using the methods mentioned above. As I cut it out (I used the first method), I replaced the bad habit with the good habit of looking at everything from a money point of view. For example, if I wanted to buy something (say for $10), but I didn’t, I would think, “Well, there’s ten dollars in my pocket that wouldn’t have been there if I just made that purchase. I just made +$10 dollars“. In the beginning, I forced myself to think that way via the if-then statement of ‘if I want to but don’t make a purchase, then think of it as money earnt’.

Because this post segued into how to stop the habit of spending too much money, I will leave you with some other tips on how to break that habit.

  • Think of the money you save as money you just earnt (as mentioned above)

This way of thinking is great for catching yourself when you have the urge to spend. Called positive reinforcement, this makes you feel like you just achieved something every time you save money.

  • Track your spending

Get a Moleskin Notebook and write down every single thing you buy in it. Seeing the numbers on a page in your own handwriting has a neat physiological effect, and makes you not want to spend as much. Over time, try to reduce the number of times you write in the book until it is zero (or close to it).

  • Create a budget

You are now accountable for every dollar you’re spending. Creating a budget allows you to see where your money is going to most, and if possible, cut that spending out.

  • Allow yourself to spend a small portion of your earnings

Rather than spending all of your paycheck, scale it down to only spending 10% of the paycheck. 1), This gives you the incentive to work longer/harder to have more cash to spend and 2), it allows you to not be ‘all work and no pleasure’.

  • Invest your money

Make your cash work for you. Seeing your investments bear fruit makes you just want to invest more money.

  • Set financial goals (both short/long term)

Having the investment goal to buy a house by 21, or have $5000 in a mutual fund by the end of the year makes you feel guilty if you do not work towards it. Consequently, you save more money.

  • Only carry large denomination cash in your wallet (1 $50 bill); leave the cards at home

This is for three reasons. 1) it is harder to give someone actual bills of money then just swiping a card. 2) The large denomination is difficult to spend under normal circumstances but will cover you in an emergency. 3) You won’t be using cards (the easiest method of payment). If you have a credit card (👎), it will cut down on your monthly balancing expenses.

 

 

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