Yahoo Finance 7 Ways To Get Rid of Your Bad Spending Habits in 2024
Many people set out with good intentions in the new year — eat out less, quit those pesky impulse purchases, and finally build up a good savings fund. Of course, all of these goals can be easier said than done. Luckily, with a little willpower, combating bad spending habits is totally achievable.
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“Knowledge is power,” said Lisa Whitley, accredited financial counselor and owner of MoneyByLisa. “At least for a time, you need to be completely dialed into every spending decision in the moment.”
Here are some ways to kick your bad spending habits for good, according to experts.
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Analyze Your Spending for a Month
One of the easiest ways to start making permanent changes to your bad spending habits is to track them, said Jake Hill, finance expert and CEO of DebtHammer.
“Tracking every purchase you make will allow patterns in your spending to emerge, especially for nonessentials,” he explained. “You’ll also get a better idea of just how much nonessential spending you do in a month, which may be just the dose of reality you need to make better choices.”
Overall, he said having a concrete picture of how much you spend on certain products or services can help you identify easy ways to cut back.
Other experts agree. Rather than using an app that passively tracks your spending, Whitley suggested spending a month journaling each transaction by hand in a notebook as close to the time of the purchase as possible (and don’t forget subscription purchases).
“Building mindfulness around your spending decisions as you make them will allow you to focus on which ones feel good, and which ones leave you regretful,” she noted. “Then you are ready to identify which bad habit you wish to break.”
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Cut Out Small Unnecessary Purchases
“Many look at discretionary spending as solely big purchases we don’t need,” said Daniel Kroytor, founder of TailoredPay. “But one way to get rid of poor spending habits is to redefine those items and then cut back or eliminate them.”
He pointed out that there are many small unnecessary purchases that we make nearly every day but give little thought to because these sums seem insignificant. These can add up very quickly, though.
“Taking into account all small purchases like fast food, unnecessary apps, minor subscription services and other not needed items — and then eliminating them — will provide you a strategy to rid yourself of bad spending habits that will eventually add up by year’s end,” he said.
By redefining your discretionary spending items and then removing them, Kroytor said you can implement a frugal practice that will end your bad spending habits and save a great deal of money.
Create and Stick to a Solid Budget
“One of the best ways I would personally recommend to break bad spending habits in the new year is to first of all, establish a flexible and sustainable budget. Second of all, do whatever you need to in order to stick with it,” said David Kemmerer, CEO of CoinLedger.
“Some people, I have found, do better with a budget with a generous allowance for discretionary spending,” he added. “While this doesn’t work for everyone, if having enough money for entertainment and hobbies is what gets you to stick to a savings and debt repayment plan, then I encourage it. “
Consult a Financial Advisor
“Another thing I have found helpful is working with a financial advisor,” said Kemmerer. “Even seeing a financial professional remotely every month or so can be helpful for establishing some accountability in your habits, along with setting up some long-term goals that can make it easier to stick with your budget for the long haul.”
Try ‘Parenting Yourself’
According to Ann Martin, director of operations at CreditDonkey, one of the best ways to keep yourself from falling back into bad spending habits is to just not give yourself the chance.
“If you keep running up a balance on your credit card, maybe it’s time to cancel that credit card or ask for a lower credit limit,” she explained. “If you use your debit card to spend money you’ll need for bills later in the month, set up automatic transfers to pay the bills early or move the money to a savings account.”
Further, she noted that some people withdraw a fixed amount of spending money in cash each month, and don’t let themselves spend more than that. “Sometimes, you just have to ‘parent yourself’ and take away the toy if you keep misusing it.”
Always Carry Cash
“As someone who has in the past been a chronic over-spender, one way I found to break this worst of my bad spending habits was to only carry cash,” said Carter Seuthe, CEO of Credit Summit Debt Consolidation.
While it might seem a bit extreme to some, he stressed that if you struggle with impulse purchases or spending over budget, cash can be a great way to rein in your spending.
“For instance, if you’re going grocery shopping, calculate out what your items should cost within a few dollars, and then withdraw that amount and no more,” Seuthe noted. “If you’re on a night out with friends, only take enough cash for a door fee and a drink. This can be a really effective way to stick to your budget and curb those bad spending habits in 2024.”
Avoid Malls and Shopping Areas
To break free from detrimental spending patterns, Harrison Tang, co-founder and CEO of Spokeo, said a highly effective strategy is to reduce your frequency of visits to markets and shopping areas. He observed that these environments often tempt individuals into making impulsive purchases. By minimizing exposure to these places, the inclination to spend money diminishes.
“Consider a scenario at a mall, where encountering a slush stand might trigger the desire to make an unplanned purchase,” Tang explained. “Rationalizing it by convincing oneself of deserving the treat after a walk is a common response. Similarly, when confronted with a store advertising a flat ‘50% off,’ the temptation to explore and make purchases becomes hard to resist.”
Curbing visits to such tempting locations can play a pivotal role in mitigating the urge to spend money unnecessarily.
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