There are a few tried and true steps to replace bad financial habits with good financial habits. Some call them bad money habits. Here you go.
1. The first step to replacing bad financial habits with good ones is realization.
2. The second step to creating good financial habits is to cut up credit cards and make limited use of credit cards.
3. The third step is to stop bad financial habits when you start to save.
4. The fourth step is to get a higher-paying job or negotiate a higher salary.
5. The fifth step to changing bad financial habits; is to find an affordable place to live.
6. The sixth thing to do to get rid of bad financial habits is to monitor spending always.
7. The seventh thing to do to stay out of bad financial habits; is to surround yourself with positive people and stick to a budget
Surprising as it may seem, many who have bad financial habits don’t understand they do. This is because of the extent of their financial upbringing or lack thereof. Some kids are taught very young that they should have a piggy bank and budget their money. They are also taught they can’t have everything they want, and that money doesn’t grow on trees.
Other kids are from the “my kid has to have everything I did not have” parent. These parents don’t understand that no matter how much money they spend or the credit they use to give their kids what they want, the child never feels enough.
This happens because kids or even young adults start using these things to give themselves a false sense of feeling good. At least this is the message they get from parents, grandparents or other relatives. They teach kids to use things to solve problems the wrong way, with things
So, buying things, and overspending at any income, becomes a never-ending spiral. The old stuff gets old, outdated, boring or broken and there is a constant stream of new stuff presented by stores, the internet or television advertising. The joy is usually short-term, but the inability to solve problems and other issues organically, not with things, becomes a long–term problem.
Once you get on your own, you find out there is no one to pummel you with a constant barrage of gifts so you get into huge unbearable debt, until you have the revelation.
The revelation is, “I don’t have to live like this, constantly trying to make myself happy with things that don’t provide long-term happiness and put a smoke screen on the real issues I have. I understand that I am making myself miserable with the attempt to be happy with unlimited things (affirmation).
There is another way, you finally realize that you have bad financial habits that are destroying your peace, joy, and happiness. Now, all you must do is figure out how to replace those bad financial habits with good ones.
With a little effort, bad financial habits can change to good financial habits-Lois
THE FIRST STEP TO REPLACING BAD FINANCIAL HABITS WITH GOOD ONES IS THE REALIZATION
The first step to getting good financial habits is to realize you have bad financial habits. You made that realization above when you moved out on your own or married and concluded that you would have to be deep in debt to get most of the things you wanted.
With that said, you realized that the debt was making you miserable.
You got sick when you went to your mailbox and opened your bills, you stayed up at night trying to figure out how to shift the bills so you could pay at least half of them this month. Then of course the occasional bill that slipped into collection agencies and you had to turn off your phone to get peace on your day off work. It was an endless cycle of headaches.
And all you wanted was peace of mind, joy, and happiness. So, you started to think that it must be possible since the current situation is so miserable.
THE SECOND STEP TO DELETING BAD FINANCIAL HABITS IS TO CUT UP CREDIT CARDS
You had a ceremony cutting in half, all but one or two of your credit cards. That one credit card will be left at home except when you travel – you need a credit card on file to rent a car or to stay in a hotel.
You make a spreadsheet to list big things you can do to immediately make money to pay off credit cards;.
Stop spending money on everything you don’t need to buy, or need to do.
Stop eating out – it is expensive and unnecessary.
Buy your groceries at a discount and shop with coupons.
If you have a car buy a monthly bus pass IF it is cheaper to ride the bus or train, if not use your car only when it is necessary.
Ask your parents if you can move back in to save money and pay off debt, with a timeline to move out.
If you don’t have parents who can help, ask a friend or relative if you can rent their sofa to you for at least 50% less than your rent an apartment. Use the 50% savings to pay off debt.
Before you move sell everything you can sell and pay off bills with the proceeds.
When you get your bills down low or to a manageable amount, go to step 3.
Keep a spreadsheet of your debt payoff and your budget.
THE THIRD STEP IS TO STOP BAD FINANCIAL HABITS WHEN YOU START TO SAVE
Open a savings account, and have money automatically transferred from your paycheck or your checking account to your savings account – at least 100 dollars a month.
Now you are saving money by not paying market rent, at least 400 per month and the 100 auto deduct to your savings account. You should be able to save 500 per month.
Keep a spreadsheet of your savings and a timeline for savings.
Pay extra to the credit card principal every single month. Pay off the lowest balances first.
Save dollars and coins in a large vase so when you need small things you can take them from your cash stash.
THE FOURTH STEP IS TO GET A HIGHER-PAYING JOB OR NEGOTIATE A HIGHER SALARY
Some people are afraid to leave their comfortable job or talk to their boss about a higher salary. They feel it may be their doom. They ask themselves questions like; Would my boss get angry if I ask for more pay? or Would if my new job doesn’t work out?
Do your research first. Find out what you must do to make yourself more valuable to your boss and company, then go to your employer and tell them how you have improved the business by giving at least 3-5 major things. Make sure he offers the first salary move, then if it is not enough you can counter it and let him know you would like more and why.
If you find the salary is simply too low with little opportunity for advancement look for a better job. Before you start to look for another job, do lots of research to find out what you qualify for and what’s available.
Talk to people in the field and take an online class or a few to improve your skills before you start to look. Improving yourself with online courses will also help with your current job. Just don’t take expensive courses that will put you in debt. There are many free or inexpensive courses online.
THE FIFTH STEP TO CHANGING BAD FINANCIAL HABITS IS TO FIND A CHEAPER PLACE TO LIVE
After you have gotten your debt paid way down, you have saved a substantial amount of money, and you have trained yourself with the mantra, “money doesn’t grow on trees – I learned that the hard way”.Then you can make more major changes.
Start looking for an affordable place to stay after you have increased your salary, or you get a higher-paying job. Try to stay away from 12-month leases. It is hard to find a place to rent that is month to month, but it is possible.
THE SIXTH THING TO DO TO GET RID OF BAD FINANCIAL HABITS IS TO MONITOR EVERYTHING
You now must monitor everything you do. Use your spreadsheets monthly to monitor your debt payoff, savings, balances, and budgets on everything. As you pay down debt, increase savings and come closer to your goals you will notice a peace, joy, and happiness space surrounding you.
Remember this feeling so you don’t go back to nausea, headaches, and sleepless nights you get from high debt and bad financial habits.
THE SEVENTH THING TO O TO STAY OUT OF BAD FINANCIAL HABITS IS TO SURROUND YOURSELF WITH POSITIVE PEOPLE
Don’t forget to include your student loans in your debt payoff and create a spreadsheet for them. If you have student loans do everything you can to make the payment in full and extra to the principal to pay them off early – that may include a second job. When you make extra payments to the principal this cuts out not only the principal but the interest associated with it. Associate with others who are paying off their student loans early.
Now that you have understood how you came to have bad financial habits and how you got out, try to surround yourself with people doing the same. It may be a family member or a good friend but choose wisely and work with that person to help each other.