Changing Bad Habits FinanciallySubmitted by Financial Asset Management Corporation on February 11th, 2016
If you want to get a handle on your finances and change your ways, you first need to identify your bad financial habits. It may seem obvious, but until you identify what you are doing wrong, you will not be able to make changes to improve your financial situation.
If you are earning a good income but still failing to make ends meet, start by taking a step back to analyze your finances. What is causing the most trouble in your financial life? Is it debt? Are you living beyond your means? Are you not saving enough? Have you chosen bad investments? All of these problems are caused by bad financial habits, and they are all things you can change.
After you have defined the problem and identified your bad financial habits, the next step is to start correcting the issues. Think about the scenarios that are causing you trouble, and then work on changing and creating new habits to help you overcome them.
When changing a bad financial habit it is best to look at the big picture; including every aspect of your life. If you are struggling with debt, start by looking at where you are overspending and why. Are you eating out too much? Spending too much on cable and cell phone bills? What can you do to fix the problem and change those bad financial habits? Once you have created a plan, write it down and keep it in a prominent spot.
Your written plan should include everything: from the changes you want to make and why you want to make them, to how you are going to change your financial life and the specific steps you will need to take to get there. This written plan will help you see things more clearly, and it will serve as a written affirmation to keep your eyes on the financial ball and keep you focused on the end result of all your hard work.
Bad financial habits do not develop overnight, and they will not disappear overnight either. No matter how many changes you need to make, it is simply not realistic to tackle everything at once. Take a step-by-step approach, working on one habit at a time to achieve your goal.
You can keep yourself on track by setting small and attainable goals. Instead of one large, overriding and intimidating goal, think about changing your financial bad habits as a series of smaller milestones. As you achieve each of the milestones on your list, you can work on the next one until you have achieved your long-term goals.
Once you have left your bad financial habits behind, you can work on making your good habits automatic. There are a number of ways to automate those good financial habits: from signing up for your company 401(k) plan and auto-paying your monthly bills to transferring part of every paycheck to a savings or money market account.
Getting a handle on your financial life is not always easy, and breaking bad financial habits can be even harder. Even so, taking a step-by-step approach to breaking bad habits and building effective ones is one of the most productive ways to change your financial life for the better.
Founded in 1986, Financial Asset Management Corporation (FAM) is a fee-only financial planning and wealth management firm providing personalized services to individuals, families and small businesses. We are committed to consistently serving our clients and providing the best services possible as defined by both our clients and us.
Unlike other financial services firms, FAM is not part of a large corporation. We work with fewer clients so that each client receives the personalized attention required to provide services of the highest quality. Our loyalty is to you - our clients.
A cornerstone of us providing the best service lies in the fact that all of our wealth managers and financial planners are CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals. This designation requires us to adhere to the following CFP® Certification Requirements: Education, Examination, Experience and Ethics.