Changing a money habit is NOT merely a matter of saying… yep, I’m not going to spend everything I earn this payday or I’m not going to overspend on my credit card this month from impulse buying.
Poor money habits I believe come from a deeper concern than just spending on meaningless stuff. Stuff that half of the time we don’t need or even use.
So where do these money habits come from?
Well before I answer this. I want to remind you what an actual habit is.
A habit is a behaviour that is learned when we regularly keep doing the same thing over and over again without even thinking.
Money habits are no different than the habit of brushing your teeth when you first get up in the morning or after breakfast. It’s a behaviour that becomes ingrained in how we treat and respect our money. One that we are fully aware of the consequences that follow if our habits are from poor money decisions.
Is there a cure for our poor money habits?
Yes, I believe there is. However, it takes time, discipline, awareness and mental strength in order for anyone to break this habit.
How long can it take to change a habit?
According to psychologists, while it may take approximately 21 days of conscious and consistent effort to create a new habit, it takes far longer to break an existing habit.
From personal experience in working with clients who want to change their poor money habits – it takes a lot longer.
You see there are deeper issues at play why some of us have poor money habits that can at times border on addiction. Just like any addiction, it’s more often than not about something that’s happened in the past.
A habit is not necessarily an addiction, though the two are strongly linked. A habit is any conscious behaviour you do on a routine basis.
Addiction is more about the behaviour to an excessive degree whereby someone feels unable to stop or control it.
Our self worth is often tied to our poor money habits. Our poor money habits can come from the messages we heard growing up and from the examples, we saw when we were younger.
Some of us spend when we feel low or unhappy to give us the kick “or high” we hope to make us feel good about ourselves. The hope that is supposed to fill the void we’re so looking to fill.
When in fact it’s much like the high you get from either an alcohol or drug addiction. Feels good at the time but hell when coming down from the high.
What’s the price of not changing our money habits?
There’s a high price to pay and that comes in the form of massive debt, poverty, unhappiness, envy & jealousy and often health issues.
So how do you move from poor money habits?
What are some of the ways to transform a poor money situation?
3 ways you can change a money habit is to:
1. First, acknowledge that you have a problem. A problem that you’re spending more than you earn, A problem that sees you with credit card debt, personal debt and other debt that you have no hope in paying off anytime soon. Being aware that you’re deep up to your elbows in debt and it’s time to get out, this is the first step.
2. Get help. Get the support you need to help you move forward. Having someone who understands and willing to help you means you’re not alone. It also gives you someone you can be accountable to. Someone who has a vested interest in seeing you succeed and live a better life without financial worry or stress.
3. And lastly, find your purpose – YOUR why. The reason you want a better life and one that doesn’t include massive debt or poor money habits. Set some goals. Write down how you want your life to be. What you want for your life and keep this at the forefront of your mind.
Writing down your dreams, goals and desires keeps you focussed and helps you work towards the bigger picture and what you want in life.
Breaking a habit takes a lot of willpower and motivation.
Ending the cycle of poor money habits is generally easier when it’s something you want to do rather than something others say you should do.
For anyone looking for coaching, support, education and help in moving towards their goals, then check out my “no lock-in contract” monthly coaching program.
The MONTHLY COACHING PROGRAM provides you with the support you require throughout your financial journey for a fraction of the price for $37 per month.
I’ve just opened up this program, as I’m getting a lot of questions asking if I have a monthly coaching program for a small cost.
Oh my gosh, can you believe it we’re now halfway through the year?
HELLO JULY! I feel like I only just came back from the January holidays.
Before we know it Christmas will be here and the stresses of having to make our money stretch that little bit further will be upon us.
So today, I feel it’s time to share some tips on preparing yourself before the year is out and having your money work a little smarter for you by looking at ways you can spend less and save more.
In this blog post, I’m going to share with you my top 10 tips on how you can spend less without feeling like you’re missing out.
So let’s dive into it.
No 1. Check Your Bank Accounts Regularly
First thing you need to do is check your bank accounts regularly. This first tip will save you a lot of money from extra charges and online fraud that seems to be happening more and more today because we’re buying more online.
Go online to your banking app or if you receive bank statements via post then check them. Look down at the debit column and make sure what’s coming out is what you’ve authorised.
Check to see if there’s been no internet fraud on your account, any subscriptions that you thought were cancelled that haven’t been and make sure there are no unauthorised amounts. If something doesn’t look right or you don’t recognise that transaction on your statement then call your bank immediately to get more information on what that debt is for.
Today with the click of a button via our fingerprint on our smartphones we approve new apps and before we know it we’ve subscribed to something that we hadn’t intended on having long term but have forgotten to cancel the subscription.
So make sure you go through regularly your bank account statements. This is the first step to keeping more money in your pocket.
No 2. List Your Debts Down
Listing your debts down will give you an idea how much you’re throwing away on interest payments that could be better used for growing your nest egg.
Look at your current debts, whether they be personal loans, credit cards, store cards or interest-free loans. Grab a piece of paper and at the top label it “Debts”. Then make 4 columns.
The first column you’re going to call it “name of debt” this is where the debt came from ie; the bank, company or person you took the loan out with
Next column you’re going to call “amount owed”
Then column 3 will be named “minimum monthly repayments” and
The last column you will label “interest rate”.
I’ve already prepared a worksheet that’s available in the resource area which you’re more than welcome to download to make it simpler and easier for you to get your debts down on paper.
Next, I want you to take a good look at what’s going out every month from the “minimum monthly payment section”. Add that column up to see how much you are giving away to the banking institution every month on your debts.
Ok so you may be going into heart failure right now and need resuscitating or you might be feeling ok realising that you don’t have as much debt as you had thought.
So what I want you to look at is whether there are any debts you can quickly pay off.
When it comes to your credit card call your bank or credit provider and negotiate with them for a reduced interest rate. If they’re not willing to look after you, research other providers who are more than happy to offer you a 0% interest rate on balance transfers for a specified period of time.
Banks are more than happy to talk to you about transferring your credit as they know secretly that you’ll never pay the card off before the free interest expires. But because you’re super smart – you will be paying down as much as you can on your credit card debt before the time comes due, so you’ll end up with a zero credit card balance in the end thus saving you hundreds and I mean hundreds of dollars in interest payments!
This is definitely one way of putting more money back into your pocket and seeing you spend less on monthly bad debt interest payments.
No 3. Start Using Cash
While you’re enjoying your interest-free credit card for the next 6 or so months make sure you leave your credit card at home and take cash with you. This will stop you from spending on purchases that you can’t afford and will also give you the chance to clear the current debt away.
Using good old fashion cash instead of using credit as this will see you spending less money because you’ll become more aware of what you’re spending your hard earned money on.
No 4. Your Small Change Adding Up Big
Save your coins!
How many times do you pay for things with cash and end up with small change and coins in your wallet or purse?
Go back to what your grandparents did and keep a jar in the kitchen cupboard and every time you get coins, add them into the jar. You’ll be surprised at how quickly it adds up to some decent dollars, which you can then use to pay off your credit card debt faster, or put towards your savings account.
No 5. Zero Monthly Bank Account Fees
Next, look for a bank account that has zero bank account fees.
Did you know you could save in excess of $500 per year just by banking with a bank that doesn’t charge monthly account keeping fees? There are plenty so shop around.
I recently did this with my personal banking accounts and I now have no monthly account keeping fees which add up to more savings and less spending.
No 6. Lookout For Foreign Transaction Fees
When shopping for a bank with zero monthly account keeping fees I want you to keep in mind whether they offer a visa debit or credit card with no foreign transaction fees.
Why is this important? Well, every time you use your credit card to buy things online whether it be via PayPal or using your credit card, you sometimes are buying in a different currency and when it converts back you may be paying a foreign transaction fee.
These are hidden fees that most consumers aren’t aware of.
In my business I use a range of apps and services that are generally from the US. When I had my previous visa debit card/credit card to pay for them – I was often slogged a foreign transaction fee and because I checked my accounts regularly started seeing this increase.
So I rang around to find out which bank or financial institution offered a card with no foreign transaction fees and luckily when I moved my personal and business banking halfway through last year I was able to take advantage of a card that offered “no foreign transaction fees”. This has seen me save hundreds of dollars a month.
I honestly hated seeing money disappear on fees, especially given I’m a money person who loathes having money come out of my account that I didn’t use or intentionally spend on. This has given me more back into my pocket, which I love.
No 7. Preloved Items
An area often overlooked is buying items second hand.
Don’t be too proud to buy something second hand online from companies like Gumtree or eBay – as you can pick up some awesome bargains. I also encourage you to go for a clean out around your home and look to earn some extra cash with items you can move on through the use of these free online selling sites.
For anyone struggling to get an emergency fund up to $2000, this is a great way to de-clutter while earning money on stuff around your house that is just gathering dust.
No 8. Bargain Shop & Shopping Online
Look for specials. Again don’t be too proud to get a bargain or special when you can.
Here in Australia, there is an app called “Fuel Watch” that lets you know the cheapest fuel for the day.
Filling up your car on the day that fuel is between 10- 15 cents cheaper will save you loads at the bowser.
There are other ways you can spend less and that’s by doing your shopping online.
We save hundreds of dollars by doing our shopping online and retailers encourage you by offering specials throughout your online shopping experience.
No 9. Discounts & Special Offers
Number 9 on my list is using Entertainment Cards & Discounts.
I wanted to share this one with you especially, as the other day my parents were buying their great nephew a 21st birthday present at BCF which is a camping and fishing store.
When they went to purchase his $300 gift card – they presented a card called The Entertainment Card.
This card offers many discounts and specials on things like dining out, shopping, travel & leisure to name a few.
So when they got to the checkout they received a 10% discount which meant our nephew is going to receive a $300 gift card that only cost my parents $270.
Bargain! Not just for my retiree parents but for anyone who loves to grab a bargain and save money.
When you start adding up the savings and discounts you can receive, it adds up to the hundreds sometimes thousands of dollars depending on what you’re buying.
So don’t be too proud to check out where you may be able to get a discount – as essentially you’re leaving good money on the table.
And lastly, another way for you to look at spending less and having more money is to…
No 10. Make Your Own Coffee
Yep, I know you love to go out and have someone make your coffee on a daily basis – I get it – coz I do too.
Why not look to invest in a coffee machine where you can buy good quality coffee beans or pods and then treat yourself once or twice a week to a takeaway coffee.
Today it appears that everyone I visit has their very own coffee machine at home.
Australians love entertaining and part of this is serving good coffee to our guests.
We are no longer happy with just servicing up our guest Moccona – we want to impress them with a good cup of coffee.
When you do the numbers – coffee machines depending on the type will pay for itself in no time.
An example of this is if you were to look at the upper end of a pod machine by DeLonghi – that’s fully automated you can pick them up new for under $350 – $400.
I’ve seen this fully automated pod machine come down to as low as $250 during sale times.
Now if you’re really clever like my husband he used points that accumulated on his credit card linking his spending to a points system and got our machine for zero dollars yep zero!
Now there are of course cheaper machines but for this example, I’m using the one we got for our camping travels as we have another bigger machine on the kitchen bench.
If you are purchasing 1, 2 or 3 coffees a day which I know a lot of people do it could be costing you around $10 – $15 + a day per person depending on what type of coffee you order and what size AND don’t forget to add in the sweet treat that normally goes with it!
We save hundreds of dollars when we travel around Western Australia because we take our little portable fully automated DeLonghi pod machine and we use the money we save paying for sightseeing instead.
So how long do you think it would take for your $200 – $300 coffee machine to earn its keep?
Well, it would take just on a month before it would have paid for itself and even less if you look at cheaper one.
Don’t believe me then do the numbers yourself – as you may be surprised at how much you are spending daily if not weekly on coffee.
Today there are so many ways to put more money back into your pocket while spending less and without having to cut costs or stick to a budget that most of us struggle to work with.
I trust this has given you some inspiration on how you can look at ways you could spend less, put more money back into your pocket and start feeling good about the way you can manage money better.
Where are the ways you could spend less while enjoying more money in your pocket?
Leave me a comment below as I’d love to hear from you.
Until next time here’s to your financial health, wealth & happiness.
A little while ago someone said to me what’s this thing you keep talking about financial muscle – it doesn’t make any sense.That’s probably because I’ve coined the phase “building financial muscle”.So here’s snapshot of what it means to have financial muscle!
So financial muscle is about building strength in your finances and it’s also about building mental stamina, as well as, ensuring your money is working for you and not for some credit company or banking institutions benefit.
It means that in a time of emergency you can pull on money reserves to get you out of a bind.
Having financial muscle is about taking the worry out of unexpected things that can go wrong and often do.
Financial muscle is also about knowing you’ve got this covered – you’ve money behind you and that’s giving you greater peace of mind.
It means you can enjoy more out of life without any added financial stress and worry.
I believe we all want the same things out of life.
We all want prosperity & happiness.
We want to live a life free from stress.
And we want to live a full life – filled with many adventures and the freedom to do what we choose.
The problem I see it is that today people are being burdened down with a massive amount of stress in their life.
Some – if not a lot – of the stress is caused by financial issues.
If you take a look again at this diagram you’ll see that when you don’t have financial muscle – it means you don’t have money working to your advantage.
If this is the case then you’re probably struggling and feeling very overwhelmed.
When this occurs it usually means you’re either spending everything you earn with nothing much left over.
Your relationships are probably suffering and you’re stressed out and if you’re not careful your health will start to suffer.
If you’re not quite at the bottom but feeling like you’re just surviving – by managing to pay your bills.I’m guessing you’re frustrated and possibly feeling angry and annoyed, no doubt still stressed out that your money isn’t working the way you want it to be.
In a recent study done by the Australian Psychology Society’s stress and wellbeing survey – financial issues continue to be the number 1 stress for people.
Today, there is not just one income earner but two in most households.
Families in general have more money coming in today than previous generations –and on the surface, things look really great.
However, we know there are more divorces today than ever before and the average family is looking a lot different now than from a few years ago.
When did we decide that we would give up so much of our core values in order to have the material things that give us the appearance of living a happier fulfilled life but in reality are not!
People are now slowly starting to question things like is it worth really getting into so much debt and buying stuff to impress people that we don’t even like?The onset of this is causing them to suffer in the process.
People are looking for options and want the best out of life without sacrificing their core values and principles.
You see…
“It’s not how much money we earn. It’s our ability to manage our money that can make the difference”!
Regardless of where you might be right now – invest some time into obtaining more financial knowledge that will lead to you making better decisions about your money and life.
This is the first thing you can do to start learning how to build financial muscle.
The second way you can build financial muscle is investing in yourself.
Investing in your belief that you can do it, while earning how to pay yourself first.
You pay yourself first by putting away every pay day a minimum of 10% into an account that you can not touch or access easily with the swipe of an ATM card.
This account should be one that doesn’t have any ongoing monthly fees and gives you the ability to automatically transfer at payday the minimum 10% directly into this account.
Having this on autopilot means you don’t have the think about transferring money and it just gets done.
You’re not going to miss this amount and before you know it you will have built up a sizeable amount of money that can now be used for investing and growing you money further.
Stick to the minimum of 10% until all bad debts like credit cards etc are paid off.Once you’re in a position then look to increase this to 15%.
This is how you build financial muscle.
Did you know that 80% of people are managing their money out of sheer habit with no real understanding why their doing things a certain way.
So often following or listening to someone who is not that knowledgeable in financial matters.Or following “the crowd mentality and subscribing to clever marketing tactics by advertisers” both can be dangerous if you’re not sure what you’re doing.
Managing money requires know-how and understanding on whether its actually good for your own situation.You see we all have different comfort areas and risk tolerances.So check with your financial adviser before embarking on any new investment opportunities to see if they fit your personal investment style.
Research has shown that when people get a handle on their money they end up making making smarter, healthier financial decisions that enable them to live with less stress.
Making changes in this area can be difficult for some than others – and it does require courage and commitment.
But unless people decide to make some major changes, there will be a very difficult future that lies ahead for them.
Obtaining financial education is one thing – having an awesome mindset is another and both go hand in hand for you to achieve a stress free life.
When you start building financial muscle you will find yourself at the top of this diagram.Feeling happy and confident that you are on track to becoming debt free, maybe looking at investment options and overall designing your life the way you want it.
Building financial muscle is about understanding how money works to your advantage so that in the end you can live a financially stress free life.
I hope you now have a better understanding what “Building Financial Muscle” is all about so you can create a stress free life for you and your family.
Until next time…. here’s to you building financial muscle.
People today are using their homes as piggy banks. Taking the equity out and re-financing their ever increasing personal debt.
The sad part of this, is that unless these people get control of their debt – their debt will take control over them and never allow them to get ahead financially.
These people will forever be in financial stress and that really saddens me!
Poverty consciousness is very real. Some of us were raised by the worst financial planners in the world – our parents. I’m sorry if I offend some people, it’s not my intention and I am not finger pointing – it’s just not their fault.
Financial education is not taught to any magnitude at school. What we are taught is the fundamentals on how to work for money and how to get a good job. We are not taught what to do with our first pay check once we receive this and how money can work to our advantage.
With every person that earns an income they should be paying themselves first!
What do I mean by this?? Well some of you may have learned this concept from a very old book “The Richest Man in Babylon”. Or some of you may have heard it from wise Grandparents or Parents. I was fortunate to learn this lesson in life from my parents. When I earned my first dollar many years ago, I was “strongly encouraged” to put 1/3 of this into a savings account.
The book “The Richest Man in Babylon” talks about paying yourself, or putting away 10% of your salary and letting it grow until it can be used to buy investment opportunities. Now that’s making money work for you!
You see it’s hard to help the poor if you are one of them.
MONEY IS UP THERE WITH OXYGEN!
They say, money doesn’t make the world go round, well I have to disagree with whoever said this. Whether we like this statement or not, without money life is extremely challenging and not as much fun!
Understanding money, how to keep it and how to grow it is essential to our life, relationships, happiness and future.
Your hard earned money should work for you and not you working for it!
The wealthy and comfortably abundant people have figured this out.
Embark on the journey with us at Financial Management 101 and acquire a greater understanding of how money working to your advantage will be life changing in all areas of your health, wealth and wisdom.
