Bad habits aren’t things that we’re proud of. The good thing about bad habits, though, is that we can break them. It takes discipline, motivation and commitment, but we can break bad habits.

Changing Money Management Habits

If you have some questionable money management habits, then the first thing you need to do is identify them.

Next, you must write them down. Committing these to paper does a few things. It creates a record of where you started, shows that you’re serious about altering your behavior, and adds accountability to your project to change.

Here’s an example list of poor habits that need to be changed:

My Poor Money Management Habits

  • I rarely save money.
  • I splurge and spend money on things that I don’t necessarily need.
  • I often pay bills after the due date.

Now that you’ve identified the habits you wish to change, you need to decide what corrective action you should take to counter these bad habits. Determine what you want your new habits to be and commit them to paper as well.

Following up on our example list, here is what the new habit list would look like.

My Goals for Good Money Management Habits

  • I will pay myself first by moving money to a savings account when I get my paycheck. I will do this before I pay for anything else.
  • I will always wait 24 hours before buying something that costs $40 or more so I can carefully consider whether I need it.
  • I will create a calendar of when bills are due and begin to utilize online bill pay to minimize the chance of paying a bill late.

Incorporating all three of these new habits at once into your life will be overwhelming and difficult, which is why Leo Babauta of Zen Habits recommends tackling them one at a time.

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[N]o matter how much enthusiasm we have for all of these goals, taking on even just two habits at once is setting ourselves up for failure,” he says. “Devote all of your energy to [one] habit change, and once it’s on autopilot, move on to the next one.”

For further reading on what not to do when breaking a habit, Babauta has compiled a list of 13 things to avoid.

Tips for Creating Good Money Management Habits

Changing habits is not easy, especially if you’ve had bad ones for a while. Here are other tips to help you break them:

  • Don’t start right away. Give your plan some time to sink in so you can prepare for the changes.
  • Tell people about your goal. The more people you tell, the more accountable you’ll be.
  • Leave reminders in relevant places. Maybe you need one by your computer if you’re an online shopper. Maybe you need to leave a Post-It in your checkbook so you don’t make any large purchases without thinking it over. Remember that reminders are your friend.
  • Devise plans for the times when you’ll be tempted to fall back into old habits. Will you call a friend that will talk you out of your purchase? Will you take a walk instead of going to the mall? If you plan ahead, you’ll be much more likely to avoid your bad habit.
  • Create rewards. If you form a good habit, you need to celebrate in a small way.
  • If you fail, figure out what you did wrong and try again. Don’t give up because you stumble. Nobody’s perfect.

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