Habits - they’re an often unconscious, routine behaviour - and when it comes to money, bad money habits can be “make-or-break”. Unfortunately, decisions made on auto-pilot can easily become behaviours which many individuals struggle with when trying to tighten their belts financially. Whilst we can confidently say that no one purposely tries to develop habits which negatively affect their finances, the overuse of credit is actually the second biggest reason why people in Australia find themselves struggling with debt. Last year alone, Australians owed lenders $1.84 trillion dollars. This equates to around $80,000 per person, per year which is above the average income per annum. It also makes for a massive amount of interest and fees, which the banks ultimately cash in on. For so many individuals to be in this much debt, there are clearly a lot of bad money habits being picked up by a lot of people. We have found that where finances are concerned it is best to REFRAME and REPLACE. This means finding a new way to look at a habit and then replacing it with something new, or a good habit. Overcoming bad money habits can be hard, but luckily for you we have created this article to help you create good money habits. And as always, if you're struggling with the burden of unmanageable debt, getting the right financial debt help and a proper debt assessment can help you tackle your finances, sensibly.

Bad money habits and how to break them:

Bad Money Habits: Immediately buying for the 2-for-the-price-of-1 deals without doing the math.

• Say to Yourself: “That looks cheap, but I don’t need two of those. Buying more than one is one of my bad money habits.” 
• Replace the Habit With: Writing a list and sticking to it you won't get sucked into the end of aisle deals as easily, unless they are products you have on your list. Fixing bad money habits that are similar to this (see also Impulse Shopping) can seriously help you get in control of your finances. 

Bad financial habits: Using your credit card at the pub or bar, and losing track of what you spend.

• Say to yourself: “It’s easier than opening my wallet each time I go to the bar, but I lose track of how much I spend when I open a tab. This is one of the bad financial habits I want to overcome. ” 
• Replace the Habit With: A commitment to a budget for alcohol and a promise that if you don’t spend it all, the remainder can go toward something you have been saving for (personal challenges rock!). Overspending money on consumables such as food and alcohol are very common bad financial habits. 

Bad Money Habits: Saving your credit card details to PayPal or subscription style services.

• Say to Yourself: “I don’t have to get up from the couch when my credit card is attached to PayPal, but I also buy things on impulse when I don’t really need them.” 
• Replace the Habit With: A set budget for online purchases, music, and movies to make sure you don’t rack up debts on credit cards as a result of online binge shopping. Online binging is fun and so easy to do, but it’s one of those bad financial habits that can cost you a lot over the long run!

Bad Money Habits: Not paying off your minimum credit card repayments in the interest free period.

• Say to Yourself: “It is hard for me to get organised to pay my payments on time, but if I set up an auto-payment when my pay goes into my account, I will no longer have to worry about keeping track of the payments. This is one of the bad financial habits I need to break free from!”
• Replace the Habit With: Ensuring you never pay interest on a credit card ever again. Add up how much interest you might potentially pay on a credit card in a year and think of all the things you could buy with that money. This will be motivation enough to ensure a habit is formed. Overcoming bad money habits such as only paying the minimum amount is a great way to prevent yourself from falling into the debt trap, too. 

Bad Money Habits: Not keeping track of direct debits, overdrawing your account, and incurring overdraw fees.

• Say to Yourself: “It’s hard to keep track of my direct debits but I could make an account specifically for these payments and as I get paid I could transfer enough to cover the payments”.
• Replace the Habit With: Maintaining an account that is specifically for bills you buy by direct debit. This is also a great habit to get into so you can check to see you are being charged the right amount.

Bad Money Habits: Paying for memberships you don’t use.

• Say to Yourself: “I keep meaning to go back to the gym, but I haven’t yet, maybe it’s time to explore a free option for physical activity and make a commitment to that first.” 
• Replace the Habit With: Walking with a friend, your pet or on your own – and it doesn’t cost a cent!

Bad Money Habits: Being lured into online shopping sales and believing a bargain exists even if you don’t need it. 

• Say to Yourself: “That looks cheap, but do I really need it?” 
• Replace the Habit With: Unsubscribing from emails from retailers who often lure you in with sales and bargains, and instead subscribing to newsletters, emails and blogs that help you to stay focused on your goals for financial freedom. It is NOT a bargain if you don’t need it! For example, you could even sign up for Credit Counsellors Australia’s quarterly newsletter (HYPERLINK) to stay up to date with our top financial debt help tips! 

Bad Money Habits: Absent-mindedly using the “Tap-and-Go” option at the checkout.

• The biggest problem with Tap-and-Go is that not all transactions come out of your account immediately, so it is much harder to keep track of how much you have spent, and it can also result in overdrawn accounts and subsequent fees. 

• Say to Yourself: “It is easy to use Tap-and-Go, but last month it caused me to lose track of what I was spending and my account ended up overdrawn.” 
• Replace the Habit With: Downloading a budgeting App which reminds you to input everything you spend each day. This will help you keep track and also make sure you see the amount of money you are spending without thinking. 

Bad Money Habits: Not paying yourself first.

• What do we mean by this? We mean not having any savings goals whatsoever. 
• Say to Yourself: “I’m saving for my future self by putting this plan in place.”
• Replace the Habit With: Organising at least 10% of your regular income to be transferred into a savings account.

All in all, knowing your bad money habits and how to break them is challenging, but it’s an awesome way to prevent yourself from needing financial debt help later down the road. When you’re about to default into a bad money habit, reframing the situation and then replacing the default behaviour with a better habit can be your biggest saviour when it comes to rectifying patterns that are standing in between you and being debt free. If you feel like you’re stuck in a cycle of constantly racking up debts on your credit card and struggling to repay them, it’s probably time to check your budget and get financial debt help to start fixing bad money habits. Our team of Credit Counsellors are expert budgeters and are here to help you go over your budget and figure out where you can cut back and get a grip on those bad money habits. Call us on 1300 003 328 for a confidential and obligation free debt assessment. The start of your debt-free journey could be today!