Infographic: 3 Simple Steps to Help Change Bad Money Habits

habit change three stepsHumans are creatures of habit—probably more than we even realize. In fact, researchers have found that almost half of everything that we do in a day isn't a decision, but a habit that we formed somewhere along the way.

And that includes a lot of the money "decisions" that we make on a regular basis essentially on autopilot, which has the potential to wreak serious havoc on our wallets. Case in point: You always head to Costco for your weekly grocery run, where you end up supersizing everything on your list—even though you're a household of two.

If you're aware that such habits are impacting your own finances, but you just can't seem to shake them, the good news is that change can be possible!

We'll walk you through three simple steps that you can take to help rewire your brain—and then you can use our handy infographic below to personalize your own plan of action to help turn those wallet-busting bad habits into money-saving good ones.

Step 1: Identify Your Trigger

Start by pinpointing the cues that set off your bad habits, says LearnVest Planning Services Certified Financial Planner™ Katie Brewer. In other words, figure out what's sparking your money decision. After a long day at the office, do you habitually fend off stress by doing some online shopping? Or do you find that whenever you go to dinner with your foodie friend, you somehow always end up ordering the steak? Whatever your vice, you'll have more control over your bad money habit once you know what's prompting the behavior.

RELATED: Quiz: What's Your Big Spending Trigger?

Step 2: Determine Your Real Reward

Once you've identified your trigger, you'll need a substitute payoff. Maybe your nightly, stress-relieving ritual doesn't end with a purchase from, but a phone call with a friend instead. So you still have a means to decompress—but you've redirected that urge into a healthier habit for your money.

Brewer also recommends focusing on a long-term reward—your ultimate money goal—every time that you feel the need to partake in a bad habit. Write down that goal ("a two-week vacation in Costa Rica" or "being debt-free by age 40") on an index card and then put it in your wallet. This will serve as a reminder how the little things that you spend on everyday are redirecting funds away from that big-picture reward.

"When you're feeling the urge for that bad habit—and you have an angel and a devil on each shoulder—you can pull out the card to help refocus on your long-term goal," Brewer says.

Step 3: Create a New Routine

The final step is to reinforce your new routine by writing down clear instructions for what to do when you feel the urge to spend unnecessarily. Studies show that this is one of the most powerful ways to establish a new habit.

"It's just like getting into a new workout routine. Instead of focusing on 'I want to lose 30 pounds,' you focus on 'I'll go to the gym twice a week,' " Brewer explains. "If you treat habits in this way—and focus on what the small step is that you can accomplish each week—then you'll really make big progress in helping to conquer those bad money habits."

RELATED: The Secret to Breaking Your Bad Money Habits (No, Really!)

how to change bad money habit

(This chart is based on the work and research of behavior change expert Charles Duhigg, as well as the input of Certified Financial Planners™ at LearnVest Planning Services.)

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

  • erica o

    I love this infographic and have decided to print it out and put it in my goal journal as well as in a frame by my desk. Although I know what I should do to get to my goal- I have some not so good habits that steer me off track. I find for me the visual cues and reminders help.

  • Marie Torres

    I am a big fan of infographic. I love the way you presented the ideas here, good job! Yes! before you can totally change your unwanted financial habit, you need to retrospect, pause and evaluate yourself.It is very important to be realistic on what you can and want to give up. Kicking bad money habits will not just keep you financially fit but also in mind and body as a whole.

  • Abby Zhang

    As with all financial/money issues, the key is to live below your means and limit debt.

    I would try to first cut back on insurance costs as they have always been one of the major issues in this country. For healthcare, you’re on your own, but for car insurance you can definitely find some budget rates. Aim for $25~ month (check Insurance Panda)​… for car insurance there’s really no need to get an expensive policy from places like GEICO, Allstate, etc… a minimum policy is enough for most situations. You can use the saved money to expand your bank account or pay off your debt.

    Also, you need to make sure you don’t have outrageous interest payments or anything like that…. that’s just throwing money away. So, you need to limit your student loans, mortgages, credit card, bills, whatever… If you MUST be in debt, you need to do it the smart way (and not the way that leads to huge interest payments every month).