money health weekly


How to Break Bad Money Habits


"You do not rise to the level of your goals. You fall to the level of your habits."

-James Clear


I angrily grab my jacket and storm out the door. I just got into a heated argument with the manager who made the schedule for the week. I knew that I wanted time off to go hang out with some friends out of town. I didn't get the time off, however. Now I'm unable to go and have to cancel my plans.

It takes a while to start my car. Something needs to be fixed, but I don't have the money to go to the mechanic right now. I finally get it to start, and I'm able to drive home.

I get home, still in a rage, and I check the mail to find out that I have several overdraft charges at my bank. If I wasn't furious before, I'm furious now.

The next thing I know, I find myself at the local big box store frantically walking up and down the aisles trying to blow off steam, looking for stuff to buy. Of course, I don't have the money to buy anything, but that's why I have credit cards.

Stress shopping was a bad financial habit, but I didn't really know that I had it at the time. But that's the thing about habits; they happen without us really knowing that they're happening.

breaking bad financial habits can be hard, but it's possible

Bad Money Habits

Habits are automatic behaviors that we partake in. They happen without us really knowing that we're doing it. This is different from a routine. A routine is a set of actions that you regularly go through, but you consciously have to tell yourself to start the routine. For example, I don't have to shave every day. Therefore, every other day I have to decide if I'm going to shave today. It's that conscious decision that makes it a routine and not a habit.

On the other hand, some people I know shave every day. It just sort of happens while they are getting ready. If you asked whether or not they shaved today, they might have to touch their face to find out if they did.

If these habits that we've picked up lead to bad outcomes or otherwise are not good for us, we would call this a bad habit. Everybody talks about wanting to end bad habits, but it's not as easy as it sounds because they are automatic behaviors.

bad financial habits are automatic behaviors that we want to change

Bad Money Habit Origins

Bad habits, and all of our behaviors, for that matter, are driven by beliefs we have about money that we don't really know that we have. These are called money scripts. Money scripts are the stories we tell ourselves that we've internalized sometime in our past. Without exploration, nobody knows that these rules exist that we blindly follow. We picked them up mostly in childhood by observing how the world works, but we also get them later in life when we experience something called a financial flashpoint.

Effectively, our brains are trying to figure out what works and what gets us out of stressful situations. It tries to pick up on patterns and spot connections that may or may not exist. When it finds patterns and connections that it thinks will relieve stress, it writes that as a rule, or a script.

bad financial habits come from our money scripts

Define What Money Habits You Don't Want

It's nearly certain that you have bad money habits that you want to change. What's less likely is that you know what those habits are. Since our habits operate automatically, it's difficult to identify exactly what our bad habits are.

So spend some time to try to understand what habits you have that you don't want. Only after understanding what you want to change can you start to take steps towards progress.