Overcoming toxic financial behaviours can be challenging, but it’s possible with some mindful steps. To begin, identify the behaviours that are causing harm. Are you overspending, not saving, or accumulating unnecessary debt?
It’s important to understand the root cause of these behaviours. Are they linked to stress, emotional triggers, or societal pressures? Addressing the underlying issues can make it easier to change your financial habits.
Self-Reflection and Awareness
Begin by reflecting on your financial habits and identifying toxic financial behaviours. Acknowledge the areas where you struggle, whether it’s overspending, impulsive buying, or avoiding financial planning. Awareness is the first step towards positive change. Consider journaling about your spending patterns, reflecting on your financial decisions, and identifying recurring themes. Ask yourself why you make certain financial choices and how they align with your values. This self-awareness forms the foundation for change, empowering you to confront and overcome toxic financial habits.
Keeping a spending diary can be helpful as sometimes it can be difficult to keep track of your spending habits, particularly when it’s so easy to spend these days with the tap of a card or phone. There are plenty of spending diaries online you could use to help you keep track of your spending. MABS have one available online you could try out, you can find it here.
Acknowledge the Emotional Connection with Money
It’s important to understand that your money and your emotions are intertwined. This is vital around this time of year as we commence our Christmas shopping. It can be so easy for our emotions to take control of our spending at Christmas, but the consequences of this arise when the bills or credit card statements arrive in the post after Christmas. Take a quick look at a previous post here which discusses emotional spending at Christmas in more detail.
Take some time over the next few weeks to acknowledge instances when you turn to spending for emotional relief or comfort. Are there specific triggers that lead to impulsive financial decisions? Understanding these emotional connections allows you to develop healthier coping mechanisms. Whether it’s stress, boredom, or societal pressure, finding alternative ways to address these emotions can break the cycle of toxic financial behaviours.
Create a Realistic Budget
To help you keep track of your finances and develop healthy financial behaviours, it is important you have a full understanding of your income and outgoings. For this, you will need to create a detailed budget that outlines your income, expenses, and savings goals. Click here to read a previous blog post on creating a budget if you are new to budgeting. Be realistic about your spending habits and set achievable targets. Theres no point creating a budget with unrealistic spending targets that are impossible to maintain. Having a clear budget provides a roadmap for your financial journey and helps curb impulsive spending.
Seek Professional Assistance
If your emotions continue to impact your spending, it is important to seek professional assistance. This can be in the form of counselling for those struggling with emotional difficulties which are affecting their finances.
Also consider seeking support from friends, family, or even a financial coach. Accountability can make a big difference. Educate yourself about personal finance, the more you know, the better equipped you’ll be to make informed decisions.
Fostering Financial Confidence and Adaptability
Knowing where your money is going and having a plan in place instils a sense of financial confidence. It empowers you to make decisions that align with your long-term goals, reducing anxiety about money matters. This confidence becomes a driving force in breaking free from toxic financial behaviours as you become more intentional in your financial choices.
There will be times when things don’t go to plan or changes to your budget may be required. Remember your budget is not meant to be a rigid document that never changes. Every so often you’ll need to adapt your budget to a new financial situation. Being adaptable is essential to managing any financial changes.
Finally, be patient with yourself. Changing habits takes time, and setbacks may happen. Remember that building a healthy financial foundation is a journey, not a sprint!