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It seems like every second article or book I read these days is about habits – breaking the bad and beginning the good. And it’s no wonder, I’ve spent the better part of the past three years building better eating, exercising, and money habits! Making some tweaks to my money habits is what helped me get debt-free and started our Reach journey!
Maybe you are thinking – what do habits have to do with money?
The answer: Everything.
My BFF (I wish!) Rachel Hollis does a lot of talking about habits. Check out her books Girl, Wash Your Face and Girl, Stop Apologizing to kick start your habit game – these are life-changing reads if you feel stuck or scared in any area of your life, or you are simply looking to level-up with your time, energy and productivity!
She explains a habit as something we have done so many times, we do it without conscious thought. Things we do without even thinking about it. Automatic responses.
Our money habits
We are in the habit of spending money. (Often more money than we have.)
We are in the habit of using our credit cards.
We are in the habit of grabbing take out on Thursdays after soccer or buying coffee on our way to work in the morning.
Often our money habits are what dig us deeper into debt or bar us from reaching the goals that seem unattainable today like retiring a millionaire, paying off the mortgage, or cash flowing our next car purchase.
The awesome news is that a habit is something you can change! You can quit bad habits and start good ones. Studies show it takes more than the commonly referenced 21 days to form a new habit. On average, you are looking at 66 days (!!!), so you need to be patient with yourself as you work at this.
4 money habits to ADD (and one to get rid of) to be more intentional with your cash!
Check your budget every day.
At the beginning of my debt-free journey, I had to write on my ‘to-do’ list every single day: “DR 5minutes”. That was my code to think like Dave for 5 minutes. Most often I didn’t need the reminder because I got a bit obsessive around this topic. (Clearly!) But, life gets crazy, and it is easy to go a day, or two, or ten, without logging purchases or checking in on the budget and bank balance. It is way easier to stay intentional with your goals if you keep them in your sights by checking in every single day.
Hop on EveryDollar (or your budget platform of choice!) and do a quick scan of what you have spent or what you have left in each budget line. Log into online banking and make sure that everything you have spent has been accounted for as a purchase in your budget. Check in on the balances on your debts. Colour in the boxes on your tracking sheets. Five minutes is all it takes to keep your head in the game!
Make a meal plan and do ONE grocery shop for the week.
One of the easiest places I found to go WAY over budget is at the grocery store. Before meal planning, I’d go to the grocery store when I felt like it (or when I literally HAD to because we were down to baking soda and salad dressing in the fridge)! I’d buy random things that may or may not combine to make delicious meals, and I’d forget half of the things I needed. Not to mention the nature of impulse shopping and throwing stuff into the cart without even stopping to think twice!
By making a plan for the week of what meals we would eat each day, it allowed me to make a grocery list and get the things I needed without all the random, often wasteful, extras. It also eliminated the anxiety I experience when I come home from work and have to decide what to cook. Win-win!
Now I sit down with my coffee on Saturday morning, decide what my family is going to be eating for the next week and make my grocery list. Then I head to Walmart, buy the things ON my list, and that’s that. It means that Dan and I both know what’s for dinner each day, and whoever is home first can get it started. It also means that we don’t have to waste time away from our family by stopping three times during the week to pick up this, that and a box of cookies. And it means that we aren’t tempted to pick up lunch when we are at work or run through a drive-thru on the way home.
Meal planning is a GREAT habit to save money, save time and make sure my family is eating food that makes us feel vibrant and alive!
Make coffee at home and take it to work in a thermos or to-go mug!
I know you love your latte or your morning double-double. I get it. But it saves SO MUCH MONEY if you make a pot of coffee and pour it in a to-go mug or a thermos. Even if you have to buy a thermos, this investment pays for itself in a matter of weeks. If you are on a first name basis with your barista, take a look at your bank statements and add up the amount you spend each month on this treat. Now ask yourself – how good will that coffee taste when I am debt free? It might be hundreds of dollars a month that you can carve off of your debts and the coffee tastes so much better when you aren’t still paying for last months coffee too!
Don’t get me wrong – sometimes a drive-thru latte on the way to work is a really wonderful treat. I’m not about complete deprivation, and if cappuccino is your love language, feed your soul, friend! Just check in with yourself to make sure you aren’t breaking the bank in honour of that caffeine hit!
Online shopping – within your budget
I am so guilty of this one. My son is five, and I can count on one hand the number of times I have bought clothes for him in a real bricks-and-mortar store. I don’t like shopping. And the comfort of my bed, in my pyjamas, credit card in hand is just so much easier! But yikes – I have spent so much money on stuff without even thinking twice about it.
I can’t tell you NOT to online shop, because the world is changing and I’d rather order the things I can online than dragging myself toward the temptation of the mall. But if you are charging more than you can afford to your credit cards, I encourage you to double check before you click ‘ship’ and make sure that what you are purchasing fits into your budget. Ask yourself if you need it or not, or maybe think about it for a day first. And if this is still a hard money habit to change, delete your credit card (visa debit, in my case!) from Google. Make it harder for yourself to not just click and ship, so you can be super intentional with every purchase you make!
Now for the habit we are going to break…
Cut up the credit cards.
Yes. I said it. If you want to reach for financial success, ending your relationship with Visa and Mastercard is a must. This doesn’t have to be forever. But changing your mindset and your habits with credit cards will take some time, and I recommend quitting the habit for at least a year.
If you don’t have the cash for the purchase, it’s not a purchase you need to make. When you spend within your budget and save intentionally for the things you want, you no longer need the security of credit cards. As you move through your list of money goals, your goal is to pay things off as quickly as possible – you don’t want to ADD to the debt total.
(And I know I just told you that you can still online shop, but to be clear: I use my DEBIT card for all of my online purchases. Nearly all online stores accept “Visa-Debit” and this way the money comes directly from my chequing account, NOT a credit card that I need to then pay off. Visa-Debit, friends! It’s where it at!)
If you aren’t ready to part with your cards permanently, tuck them into your sock drawer. Not having them WITH you will help you resist the temptation to use them! Try not to use them for 66 days, and by the end, you’ll have developed the habit of using cash and spending within your budget!
Changing your money habits doesn’t come in one day. And you might not jump on board with these all at one time. But by tweaking LITTLE parts of your daily life, you will start to see BIG changes in your bank account.