Black Women, Personal Finance, Lisa Live Well

4 Tips to Break Your Bad Money Habits this Year

Good money habits are not a thing you can learn quickly and move on. These baby steps can make it a less painful process.

It’s easy to financially “backslide” if you are not checking in with yourself. I will personally admit to being a hot money mess for many years before I started some of the practices I am going discuss this in this post and those to come. Like all of us, I am still learning. It’s a constant struggle to keep goals in focus when you want to buy dresses, bottomless brunch, and travel like a rock star… all the time.

It’s a thing no one talks about but everyone struggles with because being broke is not just a problem for the poor (think of all the broke celebrities). The more you have, the more you want. The truth is If you can squander $1000, you can squander $10,000 so let’s break some of these bad money habits before we become ballers. Here are 4 tips you can start today to help you break some of your bad habits: (Warning: Start small is said a lot – because I know yall 🙂 )

Finally… Get a TRUE Budget. I know you think you have one but how effective is it? Budgets typically fail because we write down where we want to be instead of where we are. Example, you may want to give yourself a $200 spending allowance for fun (drinks, eating out, club covers, events etc.) every pay period but in reality, you are spending $450. It would make more sense to determine what you are spending today and slowly move down to your goal of $200 rather than tell yourself that you are going to be able to cut your habit in half within two weeks. So on your budget start with going from $450 to $400.

Then work your way down month by month taking in consideration your budget will not be a one size fits all. Do not set it and forget it. Some weeks/months you may need more money because of planned events and obligations, build that into the process of planning for each month so that every dollar has a planned destination and you are not stressed about not having enough. Once you get to $200, you may still have weeks where you need $450 but determine that ahead of time. The overall point is to avoid those moments where you are scared to look at your account because you have not been paying attention.

Take a spending fast. I did this for the first time recently and it was great. Because I track all my spending, I was able to notice I had fallen back into some habits of eating out every other day. To break the habit, I took a fast on eating out for 1 month. It means exactly what you think – 30 days of ZERO eating out… not even the dollar menu.

The results were great. My diet got 95% better, I picked up some new recipes to make food interesting, started meal prepping and I spent the money I would spend at rushed lunches during the work day on new dresses for the weekend. Ayeee!

You can do this fast for any kind of spending habits you have. For some people its online shopping and others it’s rounds of drinks. If you tend to spend too much at the bar, skip the bar for a weekend or two. If you like to shop, I recommend a shopping fast of nothing new for one month, you will be surprised how much better at personal styling you will be when you are forced to “mix and match”. The key, again, is to start small, fast for two or three weeks and build from there.

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Determine your financial values. Have you ever thought about what you really would like to be doing with your money vs what you actually do? It’s a resource like anything else and it should have a predetermined destination. There is a quote, “If you want to know what people value, look at their bank book.” I am sure I did not get it exactly right but it’s still true. We say it’s important to save, travel and give to charity but what do your habits reflect? I can tell you when I was not paying attention my financial habits said I valued food, party dresses, and debt. My thoughts only began to change when I decided I have to get serious about the experiences I want to have at this age and let the stuff go.

You cannot do it all. Unless you are loaded, you cannot have the $600 car payment (plus the maintenance on that kind of car), go to all the hot spots each weekend, have a bloomies habit and go on the big, memorable vacations.  Pick a lane, girl. Write down your values, start gearing your money to those things and let the other stuff go! You may look good in the nice car and $3,000 bag but if you are barely holding on to it – how good can it be and who is it really for? No shade on the “stuff” people either, you can value whatever you want. These are examples. 

Automation is your friend. Let me preface this by saying automation is your friend if you have enough money to cover all your bills from month to month. If you find yourself living in the “red” on the essentials, I would focus on reducing debt/financial output first. But if you have your basic life essentials covered and want to save more – Automate it! One of the best things I ever did for myself to set up direct deposit into a savings account offline (I can not see it readily).

When you are just starting out – start small with something like $30/ paycheck. Then when you get a raise or a new job with more money increase it before the new money ever hits your account. For example, you have been informed that performance raises are coming and you will make maybe $60 more per check, the week before, increase your savings direct deposit by another $30 or so bucks… guess what?  Now you are saving $60 per check… that is $120 a month.

Also, increase it as you pay off things – maybe you just paid off a credit card, giving you back $100 per month, consult your budget and up your savings even more. Keep doing this – every time you get a bump, bump the savings first. You won’t miss the money because you’re saving it before you have determined its “happy hour” money and before you know it you are living the real American dream… Living on less than you make!

Like a mentioned before, good money habits are not a thing to “get down” on move on, it’s constant tweaking of the process and monitoring your own behavior. You cannot set it and forget it…life is changing and your values will change.

You can start out saving for one thing and have to change on a dime and use the money for something else but how nice is it to have that money parked.  It happened to me – I was saving for a nest egg and found myself needing to come out of pocket for unexpected medical expenses. Its a bummer but I am grateful I even had the money to pull from – and it taught me that I cannot passively save… it has to be intentional and a priority.

In this life we can only control about 20% of what happens to us but if you manage that 20% well, you are in a much better position to handle the other 80%. Saving, among many things, is a big part of that.

Pick a tip or two, and tell me how it worked out for you in the comments below.

3 thoughts on “4 Tips to Break Your Bad Money Habits this Year

  1. Start small. When I began, it was just 25 bucks a check and I moved it up the better I got at budgeting. Let me know how it works out 🙂

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