How to Change Bad Financial Habits

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You have to know at least one person who makes a lot more money than you do and yet, somehow, always runs out of money at the end of the month. They will probably say something like “the more you make the more you spend,” but usually the situation is a bit different. People just have a lot of bad financial habits they are not willing to change.

These habits can really lead you to be the person that never has enough money, no matter how much you make. If you don’t get rid of them, you’ll be able to spend all the money you have, unless you’re making millions. Find out how to change bad financial habits.

1. Cancel Your Credit Cards

First thing tomorrow morning – cancel all your credit cards. You may think that you can’t live without them, but seriously – people have survived before credit cards were even invented. So can you.

The reason why you shouldn’t have credit cards is that they give you a false sense of financial security. You think that you can afford something because you’re not really paying for it right away when you pay with a credit card, while the truth is you really can’t afford that. So forget about credit cards and checks and pay with cash only.

2. Easy on Internet Shopping


For same reason you should cancel your credit cards, you should take it easy on internet shopping. Since you’re not giving any “real” money, you tend to feel like you haven’t really spent anything, while you’re actually spending hundreds of dollars. This is a very, very bad financial habit that you really should change. Try to cut the internet shopping to a minimum. It is convenient, but it’s not really budget friendly.

3. Find Your Financial Conscience

You have to have at least one financially sane person in your life. You know, a friend or a relative who always has it together and even manages to save some money even though they don’t earn that much? That’s a person to ask for help.

Make this person your financial conscience. Whenever you are feeling tempted to spend money on something call them and ask for advice. Be decisive and if your financial conscience tells you not to spend – do not spend!

4. Set Boundaries

Determine top prizes you are willing to pay for one item. For example, promise yourself you will not spend more than $10 on a top or more than $30 on a pair of jeans. Set the prices according to how much money you make (some of us can afford a $300 pair of jeans, while for others even $30 is expensive), but don’t go over them.

5. Easy on Branded Stuff


You really, truly don’t have to have every single piece of clothing with a name. This bad financial habit can really drain your wallet. Not all of your shoes have to be Prada and not all of your clothes have to be Armani. You can buy stuff that is not a brand and still have good stuff.

You can really save a lot of money only if you decide not to buy branded things. Give up brands everywhere you can – on food, on clothing and on shoes. I know, girls love their Manolo Blahniks, but really $500+ for a pair of shoes is simply too much.

6. Pay Your Bills over the Internet

When you spend all the money on clothes, shoes and other stuff you buy, the time of the month when you need to pay your bills comes. And you’re broke. And you’re late with paying your bills, and you pay penalties for being late. Stop that!

The easiest way is to pay for your bills over the internet. Set up a permanent account and allow the money for your bills to be automatically drawn from your bank account every month. That way, you’ll save all the money you usually give on penalties.

7. Write Down Your Expenses


Make a table in which you will write every single expense. Write absolutely everything down, every dollar counts.

This table will give you an insight in how much money you spend every month, and on what. When you look at it, you will certainly see at least 10 items you bought and didn’t need. Try not to do that the next month.

8. Try Second Hand Shopping and Yard Sales

Don’t get me wrong, I’m not suggesting that you should buy everything second hand. I personally don’t feel comfortable to buy second hand clothing, but a lot of other stuff could be bought that way.

Need a new lamp? Check out for yard sales in your neighborhood. Need new speakers for your computer? Try finding them on E-Bay. Always see if you can buy something that’s used and good, before buying it completely new.

9. Visualize Your Financial Goals

If you would like to save some money for a holiday for example, you need to visualize your goals. Surround yourself with photos of the place you’d like to visit and remind yourself every day that every dollar you save brings you closer to that place.

No matter if you want to save money for a holiday or for a house, the recipe is the same. You can definitely save a lot of money only around the house, and if you put some extra effort in, results will come. And once you see how many benefits saving money brings, you’ll only ask yourself why you haven’t started saving earlier.

10. Earn Money From Your Hobby


Put your hobby into a good use and earn some money with it. There are a lot of crafts you could do at home that can bring you extra income. If you can make delicious cakes you can sell them from home. If you’re a master in making pastries – you can start your own bakery, and if you’re making tasty jams – that can bring you some money too.

This is not only good for your budget, but also for your soul. I mean, how many people gets to really love what they’re doing? Only those whose business is also their hobby.

So, that’s it. It all comes down to these things and your budget will get the extra boost it needs. If you have some extra advice to share, please do so. We can never have too many tips on how to change bad financial habits.