How to sustain better spending habits

Financial Habits
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Create the financial habits in your life that will allow you to be free from behavior that is hindering your momentum. Focus on repeated behaviors in your pursuit for better spending habits this year.


Get off to a strong start in 2016 by focusing on repeated behaviors. Our habit techniques are designed to make sure you build great habits, and destroy old, destructive ones. We call this the Multiplier magic...

We've taken principles from exercise and applied them to making or breaking habits in all areas of life.  We call it the Multiplier Magic, and we use it to create Freedom from hindering Habits, and allows us to move towards enabling Habits.

Focus on repeated behaviors

Karen Cordaway has written this article. While 2016 is in full swing, if you haven't thought about a resolution yet, don't give up. Maybe it's time to make one that has the potential to stick. If you're often wondering how money slips out of your wallet, consider becoming the crash test dummy for better spending habits. Test drive some of these ideas below to develop better ones.

Pat yourself on the back

Patting yourself on the back after following through on a behavior you want to increase goes a long way to help cement a behavior. Ginger Dean, psychotherapist and website owner of GirlsJustWannaHaveFunds.com explains the power of rewards: "When making smart money choices, celebrate them by rewarding yourself. Yes, make rewarding yourself a habit. For example, when you make it through a pay period and adhere to your spending plan, treat yourself to something nice that doesn't break the bank." She points out that this creates what we call positive reinforcement, which helps you connect good decisions with positive rewards.

According to research by Wendy Wood, a social psychologist and provost professor of psychology and business at the University of Southern California, a behavior only has to be rewarded initially to form a habit. So once the habit is established, you can relax and let momentum take over.

Try something new

While it's great to start the New Year off with a new idea, give yourself a lead and start with a familiar task. Repeat the task on a regular basis. Research shows you won't have to train yourself to do the task, you just train yourself to do it repeatedly. For example, if you like drinking water when you eat at a restaurant, choose to do it more frequently. Set rules for yourself, like, "When I eat out, I will order water." Before you know it, a small gesture will become a string of little actions that can have a big impact on how you spend. It can also do double duty for your bank account if you send the money you didn't spend straight to savings. Once you establish one good habit, move on to another like trimming a little bit of your grocery budget every time you shop. Start with as little as five dollars and put that in savings, as well.

Don't let budgeting be boring this year. Make a habit of really enjoying it, it will be more likely that you will stick to it.

Use some cash

Let your dollars see the light of day and allow the real thing to get some exercise. Fans of carrying cash can do this more so in the New Year if it helps you control your spending. If you know you tend to do major dollar damage in just one swipe of a credit card, then this tip might work for you. Curtail the urge to go on a spending free-for-all when using a credit card as a short term loan and pay in cash whenever possible. Make using cash a habit if you find it keeps you on track. Choose a dollar amount to withdraw on a regular basis and challenge yourself to not to go beyond that amount.

Graduate from a spending spree

Limit how much time you spend in a store. Research shows the slower you shop, the more you spend. Get what you need and go. Set a timer if you have to or have your eyes stay glued to your shopping list, then pay and skedaddle. This way you can avoid impulse buys and filling every nook and cranny of your shopping cart with items you didn't plan to get. Side step a budget-busting aftermath and make it a habit to make short trips to stick with your spending plan.

Do a happy dance after checking out.

When you have carried out a small, smart money choice like spending less time in the store, celebrate it. As stated above, positive reinforcement can work wonders for habit formation. So if you accomplished all of your shopping in record time, celebrate your small win afterwards. So when you're looking to applaud yourself for getting out of the store quickly, think of what Han Solo said in The Force Awakens when Finn and Rey reunited: "Escape now, hug later."

If you originally couldn't bear the thought of making a resolution, reconsider. Just know that people tend to stay with activities that are manageable. Consider following some of the ideas above to take a step in the right direction when it comes to spending this year. They can be beacons for long-term financial change and help you meet your goals. They can also help you shortcut your way to success by following research that gets results.

Karen Cordaway is a teacher and writer who currently shares money saving tips on her website, MoneySavingEnthusiast.com.

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