Breaking Bad Money Habits by Olusola Joshua Opaleye

"Rich men use most of their money to get richer. Poor men use most of their money to look richer."-Mokokoma Mokhonoana

Our everyday lives are shaped by unseen forces that influence our thoughts, actions, and consequently our outcomes. These forces are the things we repeatedly do, the patterns we follow, and are often unconscious of them. They are our habits, which carry the capacity to either empower or hinder our progress. When it comes to finances, our habits will either make or break us. As Morgan Housel noted in his book The Psychology of Money, people who do well with money aren't necessarily smarter, but are simply more well-behaved. The challenge is that behavior is hard to teach, even to smart people. Bad money habits can make even the smartest people appear foolish. However, with the right approach, unhealthy patterns of behavior with money can be broken, and healthier, more empowering ones developed.

Impulse spending is a prime example of a bad money habit. It involves making purchases of things we don't need, often justified by emotions, whims, or the need for instant gratification. People who buy on impulse will prioritize their wants over their needs, and even when it is a need, they tend to overspend. Impulse spending often leads to financial stress, where resources are squandered at the expense of core needs.

The habit of impulse buying can be addressed by practicing self-awareness, where an individual recognizes their triggers. For some, stress may be a trigger for impulse purchases, leading to a shopping spree. For others, it may be anxiety, boredom, excitement, or happiness. Many things can trigger impulse buying, so it's essential to look inward to identify these triggers and address them. It is the intentionality in addressing these triggers that will birth intentional spending, and it is through the small steps of intentional spending that we can break the stronghold of impulse purchasing and move towards a brighter future.

Not budgeting and not tracking expenses is a bad money habit because it leaves you unaware of how your money is being spent. How can you manage your money effectively if you don't know how it is being spent? Without a clear picture of your income and expenses, you may overspend, accumulate debt, and neglect saving and investing for the future.

This lack of financial awareness can lead to financial stress, reduced credit scores, and missed opportunities for financial growth. By not budgeting and tracking expenses, you're essentially flying blind, making it challenging to make informed financial decisions and achieve long-term financial stability. Flying blind is akin to navigating a road trip without a map or GPS – you may get lost, waste resources, and struggle to reach your destination.

To deal with this bad money habit, an individual can leverage technology to create their budget and track expenses. A regular review on a weekly or monthly basis will also suffice in the process to be able to make necessary adjustments in order to stay on track.

Ignoring debt or avoiding financial responsibilities is also a bad money habit that can lead to severe consequences. When individuals neglect their financial obligations, they risk exacerbating their debt, damaging their credit score, and experiencing financial stress and anxiety.

By ignoring debt, individuals may feel temporary relief from the discomfort of dealing with their financial issues, but this avoidance ultimately perpetuates a cycle of financial instability. Unpaid debts can accumulate interest charges and fees, leading to an even more substantial financial burden. Moreover, neglecting financial responsibilities can result in legal action, including wage garnishment and lawsuits.

Avoiding financial responsibilities also has serious repercussions. Missed payments and late fees can further exacerbate debt. Credit scores can suffer significantly, making it challenging to secure loans or credit in the future. Financial instability and insecurity can become a persistent reality, causing emotional distress and relationship strain.

Breaking this cycle requires confronting debt and financial responsibilities head-on. Individuals must acknowledge their debt, create a budget, prioritize payments, and communicate with creditors to develop a plan for debt repayment. Seeking professional help from financial advisors or credit counselors can also provide valuable guidance and support.

By facing financial challenges directly and taking proactive steps towards debt repayment and financial stability, individuals can break free from the cycle of avoidance and build a stronger financial future.

In conclusion, breaking bad money habits requires commitment, patience, and self-awareness. By recognizing and addressing harmful financial patterns, you can take control of your finances and achieve financial freedom. Remember, small steps today can lead to a brighter financial future tomorrow.

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