Let’s find out How To Break Bad Money Habits. Firstly, we all have bad money habits and we all know how those habits affect your pocket and you want to break them but can’t figure out how to break them. Sometimes you try to justify them but no matter how you see these habits one thing is confirmed they cost you money. It could be a 10$ snack in break time or a 300$ shoe you want in your collection. It can be little or a lot but you lose cash you worked hard for.

So the question is, how can you break your bad spending habits? So in this article, I will tell you one secret to break not only spending habits but any bad habit.

After reading a few books on habits I want to share the mystery of how habits are formed and how to break any bad habit by replacing them with good and productive habits.

Before we learn How To Break Bad Money Habits First, we will try to understand the habit loop. What is a habit loop?

The habit loop is a cycle of cue, routine, reward or trigger, craving, response, and reward.

First, the cue triggers the craving, and how you respond to it builds the routine. The routine leads to the reward. If you find the reward satisfying enough, it becomes a habit.

Here are four examples related to the formation of bad spending habits:

1. Online Shopping Routine

– Cue/Trigger: Watching a dress on Instagram.
– Craving: to look attractive.
– response: Mindlessly browsing and making online purchases
– Reward: Temporary excitement.
– Routine: you build a routine of watching something online, feeling the craving, mindlessly browsing and purchasing, and getting the reward. So if you like the reward you will repeat the whole loop again.

2. Smoking During Lunch Break Routine

– Cue/Trigger: Finishing a meal and feeling a natural break in the workday.
– Craving: A desire for a moment of relaxation or stress relief.
– Response: Going outside to smoke a cigarette.
– Reward: Feeling a brief sense of relaxation or satisfaction.
– Routine: The habit involves finishing lunch, feeling the need for a break, going outside to smoke, and experiencing the reward of a momentary escape.

3. Flash Sale Impulse Buying Routine

– Cue/Trigger: Receiving an email about a limited-time flash sale.
– Craving: The fear of missing out on a great deal.
– Response: Making impulsive purchases during the flash sale.
– Reward: Feeling a sense of satisfaction for grabbing discounted items.
– Routine: The habit includes encountering the sale notification, feeling the FOMO, making purchases, and experiencing the reward.

4. Monthly Subscription Overload Routine

– Cue/Trigger: Monthly subscription renewal notifications.
– Craving: The anticipation of accessing exclusive content or services.
– Response: Automatically renewing various subscriptions.
– Reward: Brief satisfaction from continued access, but accumulating costs.
– Routine: The habit involves encountering renewal notifications, feeling the anticipation, renewing subscriptions, and experiencing the reward.

First, there’s the cue – a trigger like a place, time, mood, people, or recent action. Then, the craving kicks in, a strong desire for the reward that makes the habit happen. Next up is the response, the actual habit driven by the intense craving. Finally, there’s the reward – the satisfaction that keeps the habit going. It’s like a dance where the cue starts the music, craving keeps us moving, the response is the dance, and reward is the applause and the whole process is routine. Recognizing the cues, cravings, responses, rewards, and routines is crucial for breaking the cycle and making better financial decisions.

6 Steps – How To Break Bad Money Habits Or Any Habits

1. Identify the routine

What’s the change you’re looking for? What’s the behavior you want to change? What’s that thing you can’t resist doing, no matter how much you try to control yourself?

The routine usually is the tricky part of the habit loop. The reward is often satisfying, and the cue may be quite simple like watching movies or browsing. It’s the space between the cue and the reward that needs a transformation. So what you need to change is craving and response in this way you can break the routine.

Note down all the routines in a diary, now focus on the routine you want to change and also write the reasons why you want to quit. In our example, perhaps cigarettes and energy drinks are an issue because you want to take care of your health and also feel it’s a waste of money. For instance, maybe buying a snack every day is a concern because you’re aiming to be healthier or see it as a waste of money.

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2. Experiment with the Routine

Now we have to find the reward our habit seeks can be challenging because sometimes The reward is often not what we initially think it is.

Let’s say you believe your smoking + energy drink habit helps alleviate stress or gets you through the day. You think it gives you the energy to make it to lunch.

Understanding why you’re stuck in a bad habit comes down to the connection between the routine and the reward. When we Experiment with the routine we can find out what part of the habit brings the desired reward.

Using the cigarette + energy drink example: What if you bought the cigarette but skipped the drink? What if you got the drink but not the cigarette? What if you chose not to get any?

All these details help you see which element of the habit provides the desired reward. Maybe it was something unexpected.

3. Identify the Cue / Trigger

Common habit triggers usually fall into five categories: location, time, emotional state, other people, and the action just before. When you catch yourself repeating a habit, there’s usually a trigger hiding in one of these areas.

In our example, the cue is clear: it’s morning, and you’re about to go to work. But often, the cue isn’t so clear. To uncover it, ask these five questions every time you find yourself stuck in your habit:

– Where are you?
– What time is it?
– How do you feel?
– Who else is around?
– What happened right before you felt the urge?

Over time, you’ll notice patterns, helping you spot the cue that triggers your habit. Maybe you only indulge in online shopping when stressed. Whatever the habit, patterns can reveal the cue.

4. Understand the Craving

This is the motivational force behind every habit. It’s the anticipation of the reward that creates the craving. Without a craving or desire, a habit would not be activated.

In our example, the craving might be the desire for a refreshing break or a sense of relaxation. Understanding the craving helps you address the root cause of your habit.

5. Response – Breaking the Cycle

The response is the actual habit or behavior you perform, driven by the craving. If a cue triggers a craving, the response is the action you take to satisfy the craving.

In our example, the response is smoking and drinking energy drinks before work. To break the cycle, you need to change this response by altering the routine and introducing a healthier behavior.

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6. Replace Unhealthy Habit

Once you understand the whole routine you need to replace the bad habit with a healthier routine. This doesn’t happen overnight. It doesn’t happen at all if you don’t work for it. Since habits tend to be deeply rooted, you need repetition and commitment to develop new, healthier habits. I find this video helpful if you want to check it out.

Imagine discovering you’ve been spending a lot because being alone at home feels lonely. In this case, you can try to keep yourself busy. If you are repeating bad spending habits when you are alone at home then you can create a new routine: spend free time at home working on a hobby, dedicate one evening to reading, or start a side hustle which will keep you busy by giving you a purpose.

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Keep in mind, your new routine won’t stick unless you stay with it. And your old habits won’t vanish easily. But if you commit and stick with it for a few weeks, you’ll find that the cues that once led you to a negative habit now guide you toward a positive one.

Our money problems often come from a string of bad spending habits. They’re tough to break, but the payoff is more money in your pocket and a genuine sense of achievement. So, give it a shot! The only thing you stand to lose are those bad habits.

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