People are wired for instant gratification. When it comes to spending money, credit cards are the great enabler. Credit cards give license to people to make purchases they would otherwise never consider. It’s empowering, but with that power, comes great responsibility. Chief among these responsibilities is paying our debts back on schedule. Without thinking or discipline, the average consumer can find themselves in a downward spiral into debt and money mismanagement. Bad habits are the root cause of the negative consequences that spring from bad money management decisions. The most effective methods and techniques for helping people break bad financial habits is the focus of this article.
Money is a tool. It’s a tool to help people get what they want from life and achieve their goals. When people take to heart that point of view, then they can be set on the right path to managing their financial affairs in a more prudent manner. Part of this process involves getting rid of those bad habits that rule their personal financial management styles. The key to helping folks break their bad habits is to convince them to focus on their life’s goals. These goals must be sufficiently inspiring to make exercising the discipline necessary to stick with their financial plan worthwhile.
Good Financial Decisions Made Automatic
Having a plan that includes scheduling payments and making those payments automatically through an online bill paying service goes a long way toward enforcing good financial habits. Of course, automatic bill payer accounts only work for fixed expenses such as mortgage payments and car loan payments. The good news is that these types of accounts mean the most when we do our financial planning, and they count the most when it comes to managing our credit scores.
Enforcing Discipline “Old-School” Style
A budget is the most effective way to attain one’s financial goals. In the past, folks did “old-school” budgeting by putting their folding money into different envelopes as soon as they got paid. Each envelope would represent a different bill that had to be paid before the end of the month. Whatever money was left after the envelopes were filled represented the total amount of spending money available until next payday. Today, anyone can still use this method even if they do not get paid in cash. By writing paper checks against bank balances, folks can fill the different envelopes with these checks. This simple form of budgeting works because it enforces discipline which lies at the heart of all we do to help people break their bad habits.
Habits of any kind can be difficult to break. This is especially true if one lacks discipline or a support system to help provide guidance and focus on what is important. As stated above, what’s important when it comes to breaking bad habits and enforcing good ones is having goals. Goals can be short-term, intermediate-term, or long-term. When somebody establishes goals that are important to them, then achieving those goals is just a matter of applying a bit of discipline.