We all have different habits whether it is biting your nails, leaving an empty carton of milk in the fridge, or drinking a cup of coffee every morning. When it comes time to talk about money, specifically about spending and savings, habits are a good source to look at. While many habits we have may not cost us anything, many habits have an impact on our finances, even if we don’t realize it. When wanting to save money these habits could be an untapped potential for big savings over time. The Manage Your Money at home course lesson on “Spending Leaks”(PDF) discusses how making changes to our habits can be beneficial in an effort to save money.
Smoking is one of the most expensive habits that, if broken, can present a great opportunity for savings. If the cost of smoking per day is $4.25×7 days a week= $29.75 of cost per week. Over the period of a year the cost of smoking would be $1,547.00. On the flip side if you are able to cut out smoking you could see a $1,547.00 savings per year! Even if you are not able to cut smoking out altogether, a reduction or half the amount can yield great savings.
Like smoking, soda, coffee drinks, or any other beverage over time can be a major spending habit that can be changed to have savings. If the cost of a soda is $1.25 and you have 2 per day that is $2.50x 7 days a week=$17.50 per week. Over the course of a year this would be an expense of $910. If you are able to cut down or eliminate soda you are looking at some big savings.
Breaking a habit, especially a spending habit, is easier said than done. Here are some helpful tips when it comes to breaking your costly habits:
• Keep the goal in site- figure out how much you will save in a day, week, month, or year and post it somewhere where you can see it. Keep this in mind when you need some motivation to keep with it.
• Start small- don’t cut out a habit all at once, but rather make a gradual reduction. This will help you from becoming overwhelmed. Small steps are better than a leap.
• Take on one habit at a time- if you have multiple habits that are taking your money, just focus on one at a time. Too many changes at once may make you overwhelmed and discouraged.
• Be patient- Realize that it takes time for someone to break a habit (anywhere from a few weeks to a few months or even a year). Don’t be discouraged, change will not happen overnight.
• Have some encouragement- have someone help you along the way by supporting your efforts.
By breaking habits that prove to be great expenses in the long run, we can find more room in our budgets to save money. For more on this topic and other money management information check out the Manage Your Money at home course on Ohioline at http://ohioline.osu.edu/mym/
Ames, E., Bard, E.M., Hudson, N., Johnson, D., McKinney, C. 2009. Manage Your Money: Stop Spending Leaks. Ohio State University Extension. http://ohioline.osu.edu/mym/MYM_Lesson3.pdf
Prochaska, J.O., Norcross, J., DiClemente, C. 2007. Changing for Good: A Revolutionary Six-Stage Program for Overcoming Bad Habits and Moving Your Life Positively Forward. New York: Avon Books
