Embrace the February 2014 Call to Action (You Could Win $100!)


bad money habitsIn case you haven’t already heard, we’re devoting the entire month of February to a series of articles on behavior change—specifically, we’re examining just how to overcome bad money habits.

As you know, we’ve been issuing monthly financial challenges (check out December’s winner here!), which we’ve rechristened calls to action. Why, you ask? Well, the first step toward changing any troublesome habit requires a will to take action.

So to kick off February’s behavior change series, this month’s call to action is simple: Tell us about the most pervasive financial bad habit you’ve broken—and, more importantly, the smart strategies you used to do it.

Were you perhaps once a serial over-spender? Or did you maybe habitually rely too much on credit cards and “forget” about the importance of sticking to a budget?

Share your habit in the comments below, and you’ll be entered for a chance to win $100! And be sure to use your email address when you comment—it won’t be visible to other users—so we can notify you should you win.

Open only to legal residents of the 50 states and the District of Columbia who are at least 18 years old as of the date of entry. Contest running from February 3, 2014 through February 21, 2014. We will select the most compelling entry as the winner, and his or her story may be published on the site.

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  • tleca77

    I started couponing a couple years ago and I have saved us about $3000 a year on our groceries and drugstore purchases. This enabled us to get many things we wanted when our paychecks couldn’t quite support the purchase. In theory, it would’ve been great if we could use those savings to pay down debt and bulk up our savings, but in reality, that money was never in our possession.
    While couponing, I’ve learned to only buy the things we will actually USE, even if there’s an amazing deal on some item plus coupons. If we’re not going to use it, that 95 cents I paid for it was still a waste of money. I’ve learned to look more carefully at what we use, what we like, and how long it takes to use food and products. We don’t need or want some crazy stockpile that takes up a room in our house, but it sure is nice to never pay full price for a tube of toothpaste and to always have a new tube in the cupboard when you need one!

  • http://reverendliz.com/ Liz

    I studied abroad in the UK, twice! Once in undergrad through New York University and then for my masters from the London School of Economics. While I was there, the dollar never really compared in buying power against the GB pound. For instance it was 2 to 1 in 2005, and then about 1.75 exchange rate in 2006 – 2007. As a result I learned quickly to do the conversion in my head of what every days things would cost, and immediately eliminate them from my budget. Starbucks chia latte for $7 US? NO WAY. Manicure for $30 (15 GBP)? Unthinkable on my grad student budget.

    I’ve since been back in NYC for nearly 5 years now, and could see myself getting comfortable with the prices in dollars for things, splurging here and there more and more. So I’ve started to implement my old strategy from my London days, and imagine that all the prices I’m seeing for something are actually in pounds, even though they’re not! It might seem crazy, but the tactic REALLY works in terms of getting you to think about how much you really want that product. For instance, really easy to kick that chai-latte habit because a small chai with soymilk at Starbucks is now 4.50, which in my head means $9! Would you pay $9 for tea and some milk? Hardly.

    Manicures are the same, I can’t stomach paying 10 – 12 when I do the math, but a pedicure for 20? I almost always was willing (once a month only!) to splurge and spend $40 on a pedicure to keep my feet maintained. That cost is worth it to me to have nice soft feet.

    Clothing is another great area of your spending where this trick really helps. The Banana Republic store on Regent street in London would have the exact some clothes for the same numerical price, but in POUNDS! When you want a sweater, even on sale, would you pay for that number in pounds? 35 pounds for a sweater, that’s $60 – $70! It helps you to get creative with what’s already in your closet and to try and match up new outfits with pieces you already have.

    So next time you’re thinking about spending money on a little temporary treat for yourself, do the fake conversion in your head of what that will cost in a stronger currency (Euros work well too for all your Spain, Italy, France semester abroaders out there). It makes saving up that money for a larger goal you have, much more do-able.

  • Erin

    Mindless spending + No budget.

    I am one of the thousands of college grads who moved home after college. After spending two months backpacking through Europe, I’m saving up money so I have a solid foundation when I move out. (Current items of concern: my flailing car, student loans and the exorbitant costs of living in southern California).

    I realized that despite living at home and having a full time job, I had hardly saved any money due to mindless spending and a lack of long term budgeting goals. I was wasting a valuable opportunity to save serious money.

    So I did two things. One, I started checking my accounts more. After analyzing my finances and realizing a large bulk of purchases went to mindless impulse buys such as expensive Smart Waters and Starbucks lattes, I started taking a moment every day to log into my bank account. Not only does it give me peace of mind (that I won’t get hit with fraudulent charges), it also allows me to see exactly where my money is going. I can visually see how much I’ve saved and stop myself in my tracks if I start slipping back towards mindless impulse spending.

    The second is I set goals. I need a new car soon and I’d love to be able to take a trip overseas in the next two years. I also have student loans and I want to move out with at least 6 months rent/expenses tucked away for emergencies. By marking out these clear goals (both financial, life necessities and fun goals), I can keep my eye on the prize when it comes to evaluating my finances and debating purchases.

    I now have over 20,000, with two months to go before I move out with a friend and some solid financial habits to rely on.

  • Lasandra Spiller

    Save my money. I never thought of saving. Every time I get paid I put $50 into my savings before I pay anything. After paying my bills I divvy up the rest between gas and outside spending for maybe a movie or dinner out. I don’t feel the difference financially because its a small amount of money to put to the side. I will have saved over a thousand by the end of the year and every year after!!

  • Keya

    For years, I’ve been in this cycle of racking up debt and paying it off (4 times). Outside of my first time of racking up debt (due to living beyond my means during my college years), I’ve gotten into the vicious debt cycle due to unexpected expenses (roommates who didn’t pay their portion of rent soon after I purchased a car, losing my job, my fully paid off car getting hit and subsequently totalled, etc. So this year, I decided to focus on paying off my credit card debt but to build an emergency fund at the same time. This means deferring paying off my remaining credit card debt by 7-8 months but I want to be credit card debt free once and for all. So far, I just have $150 dollars in my account but my goal is to deposit $50/month (if there is any extra money earned or received, 90% goes to debt, 5% to emergency fund account and 5% to personal encouragement). On top of that, my emergency fund is in a Barclay’s Dream Account that earns 0.9% (better than my bank’s 0.01%) and bonus returns from Barclay as long as I consistently deposit to my account and don’t withdraw).
    After I pay off my debt, my monthly “debt” payments will be additional deposits to my emergency fund until I have at least 6 months of living expenses.

  • jimcough@cox.net

    I work in a “tip” environment. I put 50% of what iearn each night into my account for a bi-weekly check. This forces me to really think about each purchase. In the long term this saves me interest and if I have to use a card, I only use one that I payoff every month.

  • Lizzer

    Not documenting where all my cash income went. The learnvest helped me get in the habit of documenting all my transactions, but I’ve switched from an iPhone to an Android phone so I’ve had to use Mint instead since.

  • Kelsi

    I used to struggle with going through my budgeted spending money to quickly. This year, I switched my spending budget from a monthly to a weekly budget. I challenge myself to see how much I can have leftover every Friday. Whatever is left over gets transferred to savings. A month and a half in and I haven’t overspent yet!

  • Muummy

    I used to spend over what I had in my wallet. A friend would shop with me for hours and fill her cart but would only get one thing when we were ready to check out. She told me that she wanted all these items, so she walked around the store with them, and one by one she decided that she really didn’t need this item or that until she was down to the one item she really wanted and liked.
    I limit myself to what cash I have and that helps.

    When I feel like going on a shopping spree- I get into the car and drive home. When you are not inside a store you cannot buy. I go and walk in the park and enjoy that instead. You still see people, great scenery, and keep your change!

  • Brittany

    Moving to a new city provided me with the “fresh start” I wanted. Although I have more options to shop and eat out than I had before, I’ve focused on changing what I value. Watching my accounts grow and feeling a rush after a great workout matters much more than expensive drinks or an impulse buy (it’ll sit in my closet anyway). I’m excited to see how I improve in the next few months!

  • Laurie

    We dropped Cable TV and just have a few basic channels that we can get with antenna TV. Now, instead of 99+ channels and nothing worth watching, we only have 5 or 6!

  • MaggieMojo

    Budgeting… we never had a household budget…just a vague guideline. Making the budget real helped us see when we overspent and where our pain points are…so simple but, like exercise, just needed the motivation to do it! We’re finally headed in the right direction. We started budgeting for an emergency fund too. I recently have experienced a series of health problems and having the at least part of an emergency fund really helped me not panic.

  • Chiara

    Failure to track! I have used Quicken for many years, but only began downloading my credit card and cash transactions to it recently. There’s a tool that lets you see with excruciating detail exactly where your money has gone – the first step to making mindful decisions and driving spending vs being driven by it. Makes me feel great!

  • Holly

    My WORST money habit was handing over my debit card to pay and then (secretly) cringing, hoping that it wouldn’t be denied. I approached spending money like the fishes and the loaves — if you have faith, it will just be there! Now, I know EXACTLY what I’m spending and I know if the money is in the bank. My solution was that I downloaded the mobile bank app on my phone. This has helped me SO MUCH – not only in being accountable for every dollar that I spend, but I’ve also caught TWO bank errors that have been made just in the past MONTH! Who knows how many I missed before now? Thank you, Dave Ramsey, for giving me the courage to LOOK at my money, have a plan for where it is going, and to contact my creditors (which is why I no longer have a credit card) and get on the right track! I feel SO MUCH better!

  • Roxanne Christenson

    Well, this may seem silly, but I have been a daily diet coke/coke drinker for about 40 years. I never drank coffee, so coke would be my caffeine. I would drink 2 – 4 diet cokes (or cokes) a day. About 8 weeks ago I went cold turkey. No, I don’t suddenly feel much better, but I am saving all the money I blew on it. I actually bought a diet coke about 3 weeks after I quit, nasty! Tasted like chemicals! Can’t believe I’ve been drinking that and thinking it was good for years! Anyway, back to the point, I have a lot more quarters at my disposal!

  • jessie

    Not tracking my spending. I avoided it so much I wouldn’t even check the balance of my checking account. I would just guess what was there when I got paid every two weeks. Paying bills created so much anxiety for, often times I would either for a bill or feel physically sick while doing it. Grocery shopping was especially rough. I would spend $200+ on things that I didn’t really need because of a good deal. I bought more than I needed and often had to throw things out. When my employer relocated me out of state, I had an opportunity to start over. I started committing to my grocery list and planning out meals to make shopping easier. I managed to buy only what I needed (one person does not need 4 cucumbers). I enjoyed how dramatically lower my grocery bills were. I was motivated to make other changes, such as watching movies at home instead on expensive trips to the theater. I adapted to using a budget, and managed to build in an automatic transfer for entertainment. Now I’m not just surprised but excited when I look at my account balance now.

  • Pam H.

    My most pervasive financial bad habit was not following a budget. I had no idea how much money I had coming in or how much was going out. I had no financial plan and survived by living paycheck to paycheck. Once I began documenting what I was spending my money on, I was flabbergasted by how much I was wasting on mindless spending, usually on sale items I didn’t need. I was spending much more than I was earning, leaving no room for saving. I created a budget and have been sticking to it. Now, I have my savings account growing and no longer feel the urge to shop every sale or clearance rack I come across.

  • Kelly H.

    While in college I was a chronic “mini-spender”… a few dollars here, fifty cents there, and by the end of the month, hundreds of dollars ended up gone. When I graduated and went on to grad school (racking up even more student loans), I vowed to keep a tighter hand on my finances, which meant cutting out these mindless mini-money wasters. To do that, I left my credit cards at home and only used them for large purchases that I had thought long and hard about, kept my wallet in the car so that if I wanted to buy something at school or while doing other things, I had to think about the purchase for the entire walk to the car (which made most mini-expenses not worth it). I also started keeping snacks in my car (that were bought for cheap in bulk and portioned out by hand), and kept a refillable water bottle on me at all times, since most mindless spending was on food and drinks. A few years later (and a few thousand dollars richer), I’m so happy that I did!

  • Cassie

    Flying through cash! Whenever I have cash on me, I will spend it. I’ve learned to only take out cash when I really need it, and I only take out as much as I can afford to spend that week. This keeps more of my cash where it should be- in my bank account! :)

  • Jessica

    The problem I used to have with money was thinking that if something was on sale that meant I couldn’t afford not to buy it. I soon realized I was buying things just for the heck of it and not even using it! I had clothes that I purchased on sale with the tags still on them in my closet. I looked at them thinking I would wear them but the problem was I didn’t even like them. They were on sale and I figured by being on sale I needed to get it before the price went back up or it went away! I have since fixed this problem by recognizing the sale then spending a day to think about it. Do I need it, is there something else that I have that does the same thing (hair products)? Would I rather spend my hard earned money on something else? All those questions would pop in to my mind and most of the time I decided to pass on the sale!

  • Hallie

    Daily grocery shopping…even though we made lists before we are more focused on meal planning and having the necessary basic supplies. I keep my grocery/shopping list in my planner with me at all times and when my fiancé or I notice something running low I immediately put it on my list. He will even text me if I am at work so he doesn’t forget.

  • Kyla Hickey

    I used to spend all of the extra money from each paycheck instead of saving it. I’d spend money on going out to dinner, shopping and buying things on Amazon I didn’t really need. I’d always justify this spending by telling myself that I deserved to enjoy life now instead of worrying about the future. But shortly after I graduated from college and felt the burden of my student loans, I knew things had to change. After starting my first full-time job, I finally set up an automatic savings plan with my bank so I wouldn’t be tempted to spend any extra money in my account.

    I also began tracking my savings progress in a Google spreadsheet, which turned into an easy and motivating way to keep me on track. I find that by having tangible and defined goals for saving (like building an emergency fund and planning for travel), I’m much more likely to remain consistent with saving and no longer fall into the trap of spending money unnecessarily.

  • Amanda Dawson

    Our bad habit was setting a budget and not sticking to it! We have gotten much better about it by using the Money Center and reading articles on LearnVest. I know it hasn’t been a terribly long time yet, but we have stuck to our budget for 5 months, which is the longest we’ve ever stuck to a budget. Most days I do a daily minute on my phone or laptop and then tell my husband how our accounts/budget is looking. I’m so glad we are finally doing this! We have been working toward a down payment for home, paying off my husband’s student loans, and saving for retirement. It’s amazing what sticking to a budget can do!

  • Kellie

    Here’s my story/journey. I’ve always been interested in money and how you work with it. Unfortunately everything i read i did not apply to myself. My husband and i got married over 30 years ago and our discussion on money was you do it, i voted for both of us but he said you or I, that was it. I should of known then that, that was not the right way to handle it. So our communication was bad, with that being said i have always felt it was my fault when we couldn’t afford to do things or buy things that i think he or i needed. Fast forward we started our own business in 2006 which was going well until the economy crashed and we’re in construction. We used some of his retirement to live on, went into foreclosure on our home that we’d been in for 25 years, and saved it. I found a job 2!/2 years ago and are now finally making headways towards a come back .I’m 52 years old and starting over, scary! But i now feel like the weight has been lifted off my shoulders by talking about all the ugly stuff. Regardless of how hard it is. I was always afraid he would leave me because of our finances but the truth be told it was our finances and he needed to be involved. I’m soaking up financial books by the dozen and putting into place a action plan. I’m invested in my employers 403 b contributing 15%. We’re working on an emergency fund, and our bills are paid automatically each month, all while i make $12.36 an hr. I’m in the process of signing up for school so i can move up in pay. My husband is still working for himself and contributing to our finances a little as work comes in. I hate that it took all these years to learn the hard way, to start over. But I’m so grateful that I can save something and learn something from this. That is communicate, and don’t stick your head in the sand, because when you come up for air your still gonna see the truth.

  • Whitney

    Shopping. I did it when I was bored or as a thing to do with friends. I usually bought things that weren’t great quality, but obviously the amount I was spending would quickly add up! I’ve since tried to make much more thoughtful purchases, especially when it comes to clothes. I no longer buy random shirts at Target or scarves when I don’t need them! The money I’m saving is helping me pay down my credit card debt and build up my savings.

  • Sasha

    I have a tendency to overspend and not have any idea what I’m spending or where – so I am now keeping an Excel spreadsheet where I log my every purchase and am totaling what I spend where so I have a better idea of where my money goes.

  • diana

    I used a combination of tactics: (1) set a budget for the month, (2)
    designated one day a week to get all purchases done, and (3) employed Alexa Von Tobel’s quick-minute morning routine to remind me of my savings goals.
    Setting the budget for the month helped me frame my goals for that month. I then broke it down to what my allowance would be each week given that monthly budget. I designated Sundays as my shopping day. During the week, I kept track of what I needed/wanted in a simple table that lists the item and where I wanted to get it (specific store or online shop). Shopping once a week helped in several ways (1) I no long mindlessly shop throughout the week which saves time, money, and mental energy worrying about my budget daily; (2) when I got home from shopping on Sunday, I recorded how much I spent on each item,
    which allowed me to see if I’ve stayed within my budget; and (3) waiting all week to shop allowed me to think about the items I wanted versus the items I truly needed – plus, treating my Sundays as a “shopping spree” day was fun!
    Every morning throughout the week, I took a quick glance at all my finances (courtesy Learnvest) just to see how all my money was spread out. This quick glanced kept me focused (and proud of) my progress towards my savings goals!

  • Leanne

    My worst habit was Stress Online Shopping. Every time I was stressed out I would go in my inbox and find deals that were emailed to me. Those emails about sales were my down fall. I was of course saving money so I didn’t think it was that bad. I ended up wracking up debt and getting more stressed. Eventually I realized I had a problem and called Learnvest. The lady I talked to basically said the magic word “unsubscribe”. And I did. I unsubscribed from every place that sent me deals. I also decided to go on a new clothes sabbatical for a year. The only things I was allowed to buy new was underwear and socks. Other than that I bought clothes and only things I needed at thrift stores and tailored them myself. Not only did I save money but I was getting practice at sewing. Now a year and a half later I can buy new clothes again but I only buy what I really need while feeling much more in control and I go through my closet and donate what I don’t need. During my year off from purchasing I really learned that things don’t make me happy, in fact de-cluttering and clearing out the inventory of my life really helped relieve a great deal of my stress.

  • Gracious

    Overbuying and wasting groceries! I often buy food, only to let it spoil in the refrigerator, or get freezer burn. Too often, I decide that I want to eat out rather than to eat my leftovers and things go bad. So every 3 months, I do a freezer challenge. I take an inventory of the items in my freezer and plan meals around what I already have. I buy only items necessary to complete meals using the foods from the freezer. Then I try to empty the freezer by using what is already there. When I run out, I treat myself to dinner and restock. The initial restock is a little more costly, but less food goes to waste, and the challenge of eating through my frozen items means that I am less likely to splurge on eating out!

  • Marie

    Bad habit – not having a budget and not knowing where our money was going. How we fix it – write out a budget before every paycheck where every dollar is accountable. Knowing where our money is going in groceries, entertainment, travel, necessities, gifts, etc. has made it possible to save 50% of our income each month! How we cut back – cancelled cable, negotiated insurance and cell phone plans, moved storage hour away for better rates, brew own coffee, make own beauty supplies, make gifts, buy only sale items, use coupons, cut back on eating out, and simply being conscious of how we’re spending money. Take away – Small changes and sacrifices make a huge difference and it’s all well worth it! We’re thrilled to see our bank account grow quickly and meet our goal of buying our first home!

  • daynalynndavis

    I used to think I was lively “pretty much” on a budget, even though I never wrote down what I spent and I rarely looked back at the end of the month. It was no surprise, then, that I ended the month with next to nothing in the bank account. When I decided to get serious about a budget, I looked back at my expenses for the last month and realized I had spent $500 completely unnecessarily on food and random snacks. I had also spent a few hundred dollars on groceries that I was mostly throwing away each week. So I decided to stop wasting money on going out to eat and running to Starbucks every single day. Here’s how I did it: 1. Took a weekend out of the month to make meals in bulk and freeze them. This way I had plenty of options to choose from for lunches and dinners. 2. Gave myself a $20 a week cash budget to use for whatever I wanted – sometimes I used it for an iced tea in the afternoon, sometimes to grab dinner out on a Friday night, but when that cash was gone, it was gone. 3. Started tracking the money I spent each month and took the time each month to double-check that I wasn’t overspending in the food category.

  • Mary

    The financial bad habit I’ve broken is NEGATIVITY. Personal finance felt overwhelming to me after I finished graduate school just over a year ago. I was juggling a move across several states, the task of finishing my dissertation, starting a new life, and building a program at the university where I teach. Somehow, establishing a budget and sticking to it seemed like just too much to handle alongside all that change. But when the dust began to settle, I realized I could do much better in the personal finance arena. I also realized I would need to make it fun and positive in order to keep up my motivation and progress.

    I decided to focus not on what I have to pay off (student loans, etc.), but instead on the progress I make each month. So rather than just tracking my debt, I focus on tracking my progress in net worth each month. Through a combination of debt payment and savings, I see that net worth improving. This, in turn, gives me motivation to save as well as to spend mindfully. It also encourages me to set new personal records for monthly progress.

    Here is how I keep track of my progress. I designed a poster with a large ear of corn on it. (You’ll understand why in a moment.) At the top of the poster is the following fable:

    “In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

    ‘Why not come and chat with me,’ said the Grasshopper, ‘instead of toiling and moiling in that way?’

    ‘I am helping to lay up food for the winter,’ said the Ant, ‘and recommend you to do the same.’

    ‘Why bother about winter?’ said the Grasshopper; ‘We have got plenty of food at present.’ But the Ant went on its way and continued its toil. When the winter came the Grasshopper had no food and found itself dying of hunger, while it saw the ants
    distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew:

    It is best to prepare for the days of necessity.”

    Under this fable is an ear of corn, with demarcations across it at regular intervals indicating progress. As I save and pay down debt, I fill in the lines across the ear of corn and mark the month and year next to the line. I LOVE seeing that ear of corn get colored in gradually! It makes the process positive and feasible rather than depressing and overwhelming.

    I hope this is helpful for other readers, and good luck with your own progress!