One of the most difficult things you can do is to change your habits. Often the best way to do this is to completely start over in a new situation, like at a new job or move to a new town. These opportunities shake up your routine enough that you can drop the bad habits that you are struggling with a bit more easily than if you continue staying in your usual routine.
The truth is that you are comfortable managing money the way you are right now or you would not keep doing it. You may be pushing yourself closer and closer to the edge and deeper in debt, but it is easy to ignore the problem because you have always managed to get by. It may take a big event like losing all of or part of your income, facing a huge unexpected bill or even a family emergency to jolt you out of your current situation. This can help you as you strive to change your financial habits.
If you have had an experience that has woken you up and led you to change your current situation or if you are just ready to change, you will need to take a look at your current financial habits and recognize the areas you need to change. The most common mistake people make is the failure to start out with a plan. This does mean a budget, but it is more than just that. Why create budget if you do not have something you a reworking towards? Following your budget can be difficult, and you need motivation to stay on track.
Once you have your plan in place, which should involve several long term and short-term goals for your finances, you need to create your basic budget. This is likely the easiest part of the entire process. A budget allows you to decide when and how to spend your money. It gives the control back to you, something you did not have if you were ignoring the situation. Your budget may change slightly from month to month as your needs change, but the bones of your budget should be pretty set. For example your mortgage or rent payment and your other basic bills should not vary too much from month to month.
The trickiest part is actually changing your money habits. You need to identify the areas that are your weaknesses and address them, by creating new habits around them. Failure to take this important step will cause you to sabotage yourself financially. If you fail to balance your checking account and put your account into overdraft on a regular basis, then you need to change how you balance your checking more often. I like to check on my account balance, mark the items that have cleared, and check for any entries I may have missed entering each morning. The process takes less than five minutes, and it is part of my daily check my email routine. I worry less when I know I’ve checked in each day I know were we stand on our budget.
Another area I have a hard time with is cooking dinner each evening. The evening rush with homework and activities for my children make it difficult to motivate myself to cook. I do best when I can prepare ahead and have a t least a portion of dinner started. I have the most energy in the morning, and starting dinner then makes a huge different. When I’m consistent with this I can save my family over $100.00 a week. It’s worth the extra effort to cook at home, but I need to do it in the morning or I am less likely to follow through at dinnertime.
If you have a problem with impulse shopping, stop going to the store as a way to relax or unwind. Take a list with you, and estimate how much it will cost before you go in. Then take in just enough cash to cover the purchases on your list. If you need to the first few times you can take an extra $20.00 to give yourself a little extra wiggle room. Switching to cash can also help you stop spending or overspending, because it helps you realize when you have run out of money.
Take time now to create new routines that will help save you money. If you want to start taking a lunch to work, but you are too rushed in the mornings, start packing it at night, so you just need to grab it on your way out the door. If you spend money on a coffee run on your way to work each day, splurge on good coffee and coffee maker and try reading or relaxing with your coffee before you head to work each day. Change your route to or from work if it takes you past your favorite place to spend money. This advice is similar to the advice that people get when they want to lose weight. If you want to change your financial habits, you will need to change your lifestyle.
Although the process may not be easy, especially in the beginning, it will begin to get easier. Break the changes down and slowly work on one or two at a time. You do not want to overwhelm yourself and set yourself up for failure. If you set a goal date for each of the changes, you will be more likely to reach your goal, and make the necessary changes to your financial habits.