How to Break Bad Spending Habits

by on May 13, 2013

A common problem for every consumer is figuring out how to break bad habits. We all make purchases that empty our wallets and make us scratch our heads down the road. The biggest issue with resolving bad spending habits is the all-or-nothing approach often given in advice columns. You need not live like a hermit while trying to squirrel away change each week. It is important to look at all of your spending habits and behaviors to assess areas of improvement. The best mindset when looking at spending habits is to imagine your bank account filling with additional money with each cost-cutting measure.

Major purchases including cars, homes and real estate can lead people to make strange decisions. You might conduct some research before heading to the dealership or meeting a real estate agent but sales pitches might push you toward a quick decision. A salesman at your local car dealer might not get you to buy a car you don’t want but could push you toward a car loan with unfavorable rates. Your realtor could sell you on a larger condo or home than you will ever need, leading to higher mortgage payments and more expenses in filling the property. You should take a breather between the sales pitch and your final decision to make the right choice for your finances.

The commute to and from work can be wrought with bad spending habits. You may find yourself making a stop at the Starbuck’s on your way to work every day or making stops at convenience stores or fast-food restaurants for quick snacks. This spending habit can be difficult to break because each purchase might only be a few dollars. You should keep receipts for each purchase in your glove box and count up money spent over a typical week. The running total from week to week will show that you have turned occasional treats into an expensive habit.

Grocery stores and big-box retailers place items at checkouts to attract quick sales from waiting customers. These “impulse items” range from inexpensive paperbacks to candy and gum that is relatively inexpensive. Impulse shopping can become an expensive habit if you imagine purchasing an item each time you stop at a gas station, grocery store or retailer. Retailers use these purchases to build up small profits with high-volume transactions while providing products that are often unnecessary.  You should keep this sales technique in mind as you ponder picking up a candy bar, soda or magazine while waiting at the checkout.

An effective way to break bad spending habits is to ask if a prospective purchase can be accomplished at home for less money. Your trip to a local restaurant that creates easy-to-make dishes like spaghetti, pizza, and burgers can easily be replicated at home. The costs of purchasing the ingredients for similar dishes are often far less than restaurant bills. You can also plan your trip to a local pizzeria or Chinese restaurant to pick up food while completing errands rather than pay delivery costs. You don’t need to avoid enjoyable meals, purchases and entertainment if you simply reduce unnecessary purchases on a daily or even weekly basis.

{ 19 comments… read them below or add one }

Simona May 15, 2013 at 6:16 pm

Oh, this is such a delicate issue to me… I`ve always been a reckless spender and every time I get a larger amount of money in my hands I immediately start spending it bit by bit and keep lying to myself that I need all purchases. Then, when I get home, I usually feel so guilty and so naive looking at the all the shopping. Now, why would I need a hat when I don`t even wear hats? I hope that your tips will help me. Thanks.

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Dan May 19, 2013 at 2:31 pm

I don’t even want to imagine how much can you loose from bad spending habbits. People that work hard for their money should invest in a little bit of financial education in order to manage their hard earned money better. This was a good article. Thanks for sharing this with us!

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certified financial advisors May 20, 2013 at 6:56 am

Yes it is biggest concern these days may people facing. Best way to break this habits is make right financial planning with respect to your earnings and your necessary requirements of day to day life. If you start cutting your unnecessary spendings and stick to spending on what is necessary for you, then you will save lot of your money and will surely lead you to better financial savings and no worry about finances.

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Emilia from seo training jaipur May 20, 2013 at 9:26 am

Oh, I need all these tips! I really have to put a break, if not an end, to my unnecessary spending. Thanks for sharing these tips with us.
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Stacey from gazebo for sale May 21, 2013 at 3:22 am

As a shopaholic, I am guilty with spending way too much on things that I really do not need. Maybe it is time for me to save some for my future. I will follow your steps. Thank you for sharing!

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Myrtle Turner May 22, 2013 at 4:06 am

I find that one of the biggest expenses is one that you mentioned in your final point. When people go out, they spend a lot of money on food they could otherwise make themselves. If they stayed home and learnt to cook, they could have a lot of fun and have a bunch of money left over than if they were to go out.

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donatus May 26, 2013 at 8:45 am

I love your points on purchase of bill, yes, i prefer to buy the ingredients myself and make the meal than paying for bills in the restaurant which is a bit costly. and one advantage is that when i prepare the meal myself i usually remain some for next time but with that of eating out in the resturance you have spend more than expected trying to satisfy your self.

Thanks for sharing
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Terry May 26, 2013 at 1:07 pm

I guess many of these bad spending habits are related to convenience. Certainly picking up a meal at a local takeout place is easier than planning for and doing shopping and the spending 30 minutes to an hours creating the dish of your choice. Nevertheless getting into the habit is probably one of the greatest challenges. Making sure you have all the ingredients for your favorite meals at home makes it a whole lot easier to skip the restaurant visit and save money.

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Donatus June 2, 2013 at 2:34 am

Nice point on purchase of bill. buying the ingredients myself and make the meal than paying for bills in the restaurant which is a bit costly. and one advantage is that when i prepare the meal myself i usually remain some for next time but with that of eating out in the restaurant you have spend more than expected trying to satisfy your self. Thanks for sharing.
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Joy from Personal Trainer Coogee June 2, 2013 at 3:29 am

Thank you! These things are what am I looking for for a very long time. I need to discipline myself. Thank you for sharing. keep it up!

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Krisitne from gazebo perth June 4, 2013 at 7:53 pm

I am now confessing something, I am a shopaholic, and I need this kind of blogs to stop me from being one, I need now to stop. Thank you for sharing!

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BackFlip June 13, 2013 at 7:11 pm

This should be required reading for everybody in my family. 🙂 I don’t get it. I’m a tightwad with money, but they’re all spendthrifts. The concept of “saving for a rainy day” is outside their understanding. Thanks for reinforcing what I’ve been saying all along.

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liztrull June 16, 2013 at 6:30 pm

I am definitely guilty of having bad spending habits. I really need to sit down and look at how much is being spent on seemingly little things and find ways to cut that back so we can save for bigger items in the future. Thanks for the great advice.
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phinancial freelancer June 21, 2013 at 1:29 am

I enjoy learning different ways to save money, budget and cut back on unnecessary purchases; but breaking bad spending habits is a daunting task!
The first thing I do is admit I have a problem in some areas more than other’s, then I don’t have to feel guilty about over spending. And focus on creating new good habits.
The second thing I do is set goals tailored to my individual needs. I recognize that I can’t cut back on all bad spending because sometimes being too hard on myself causes rebellion which makes me go out and spend more.
The third thing I do is tell a family member or friend what i’m trying to accomplish and get that support group going for accountability purposes.
The next thing I do is get my goals started and pat myself on the back when I avoid a common pitfall.
And finally I don’t get upset when I make a mistake I just get right back at it until i’m satisfied with my progress, then after that, I do my best to keep it going.

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Mitch Carson July 7, 2013 at 10:25 pm

Great Article. As a Newbie Blogger, I gained so much knowledge! Thank You so much for sharing all these valuable Information.
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stanfordsarah July 8, 2013 at 10:30 pm

thanks for these helpful tips! I actually just signed up for a debt reduction tool through the site readyforzero.com and in there it has some helpful hints about how to stop spending so that you can really reduce your debt. I’m in an extreme case; have been unemployed for over a year and have had to move cross country, so I racked up some credit card bills in the process. The problem is that my old lifestyle won’t take a break. It’s hard to stop my social life and stop meeting up with friends for a drink or dinner. And each time it is about $30 or more once you figure in parking, tips, etc. So I really feel like I need to cut my social life down a couple of degrees. I would like to see real life suggestions for what to do with friends that does not cost money or little money. I know this would help lots of people out there!

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misslovely July 16, 2013 at 6:36 pm

These are very wise and thought-out tips– I’m definitely going to use them in my everyday life from now on! I’m proud to say that I try not to spend unnecessary money everywhere I go; my trick to not over-spending is to picture in your mind what you actually need that money for (i.e. mortgage, vehicle, vacation…). Everything in our society is beginning to become more and more expensive and the demand is higher and higher thanks to marketing and advertising, and sometimes it just becomes all too much for our bank accounts. Take a step back, analyze what you want to buy, and evaluate whether it’s needed or not.

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Vasiliki Karakatsanidis August 8, 2013 at 2:56 pm

To all of you who don’t know how to stop BAD spending habits, there is a simple solution:
discipline yourselves! search different ways to save money ,at the same time you spend them.
Do a little work that will benefit you by looking for discounts,special offers and cash back.
Do not look for credit card offers or something with a hidden fee because you will defeat your
purpose.Look for something that has not fees involved of what so ever and go from there.
Is there such a thing,involving all good shopping benefits together? YES THERE IS!
Give yourselves a little time to compare and make a decision for your finances.
Unleash your economic power and take control of your money.There are ways and no EXCUSES!
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SJ Scott October 2, 2013 at 9:36 am

Chris,
You are so right. Breaking bad spending habits can be one of the difficult tasks, because it is not a binary decision. YOu do not have the choice of Spend money/Spend no money. YOU still need to buy things, the desire is simply not to be WILD with your spending.

This can be tough!

But you give some great advice, specifically the limiting of the impulse spending, which is one of the keys in my opinion.
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