Do you ever feel like you’re stuck in a cycle of bad money habits? You say you’re not going to spend on a particular thing, then you do it anyway. You promise this is the last time, for real this time.
Money deja vu happens to all of us. We make promises to ourselves that are harder to keep than we realize; when we break the promise, shame makes us vulnerable to even worse money habits. It’s a destructive money pattern, but you can regain control.
Step one, realize that breaking out of an unhealthy money pattern is about more than willpower. Step two, read on.
How to break bad money habits
1. Get to the root of the money pattern
The patterns we develop aren’t from nowhere. They’re the result of biases, internal money scripts, and things we’ve been taught our whole lives.
That’s why trying to fix a money habit without knowing the root is a fruitless endeavor. Get to the core of what’s causing it so you can understand why it’s happening. Only then can you start taking steps to change the habit.
A common issue is turning to money to fill a void. This can lead to regularly indulging in retail therapy.
There’s also the habit of letting fear drive your money decisions. That could prevent you from doing things that could grow your money, like investing. It could even cause you to do things that might lose money, like selling investments too early because of market fluctuations.
In both cases, you might initially think that overspending or being too cautious are the issues themselves. But they’re not — the thing underneath is the issue. Why do you overspend sometimes? Why do you take caution to the extreme?
It’s not always easy to get to the root of the problem. If you find yourself getting nowhere in your search for answers, seek help from a financial therapist.
2. Break out of autopilot
Habit aren’t inherently bad. They exist so we can easily process the hundreds of decisions we make daily. As explained in Psychology Today:
“Wendy Wood … points out that contextual cues trigger habitual behavior. In other words, when you are in a rut, you have mindlessly outsourced your brain’s executive control to these cues. You run on autopilot. It is easier to respond to such cues reflexively than think about it and do something else.”
Autopilot is efficient, but problems arise when it leads to things that aren’t good for us. So how can you regain control? According to Wood, it’s to “inhibit” your automatic response to a trigger:
“Bad habits, unlike responses to temptations, are controlled most effectively through spontaneous introspective awareness and executive control. (‘Why am I doing this?’ … ’I don’t want to be doing this’ … ‘don’t do it’ … ‘am I backsliding?’)”
Put simply, stop and ask yourself “why” before you complete the action. Regular mindfulness, especially when you’re engaging in the activities that trigger your money patterns, is vital to break your money pattern. You might find that breaking out of autopilot this way alerts you to a bad money habit before you complete the act.
3. Replace your money pattern with something that solves the core issue
Even after you discover and understand your triggers, you still have to fight the impulse to act on them. Since the impulse will still happen, making sure it leads to good money habits instead of bad ones is how you can win that fight.
For example, if you have a natural impulse to spend money online after a bad day, why not switch that impulse to transferring money to a savings account instead? If you can’t seem to stop yourself (yet) from looking at items online, you could even put the exact amount of money your purchase would have been into your savings account.
This simple act could make you feel so good that you no longer want to make the purchase, thus turning a negative trigger into a positive reaction.
Let’s say you deal with a fear-based money mentality that gets triggered. Instead of slipping into a downward spiral, reach out to a financial professional you know and trust. Turn your worries into questions, your spiral into constructive answers.
Suddenly, you’ll be developing a habit of gathering information when you feel fear — a much more positive reaction than making money decisions you might regret.
4. Remember why this is important to you
In the heat of a moment, it’s really hard to slow your brain down and follow through with good money habits. When you struggle with this, remind yourself why this matters. Remembering your “why” is a key element in setting goals and attaining them.
If it helps, create a visual representation of what good money habits will give you and put it in your wallet or next to your computer. You could even name your savings account after your goal. It doesn’t matter how you do this, just that you find a way to keep the end result at the forefront of your mind when those impulses come up.
We all need reminders of why we want to do the things that are good for us, especially since it usually means we have to delay gratification. But rewarding yourself with reminders of your ultimate goal (and even visualized progress towards those goals) can help you feel that gratification you naturally desire when you need it most.
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