How Do I Change My Spending Habits?

Finding it tough to squeeze out the nickels and dimes needed to reduce debt, invest in the future and create financial freedom? Read on find out how you can take control of your spending habits.

spending habits credit card

Get the sense that your spending habits are not what they should be? Do you find yourself sometimes buying for the sake of buying – to feel happy? Finding it tough to squeeze out the nickels and dimes needed to reduce debt. Do you need to rent space just to hold the junk you hardly ever use? If you can answer yes to any of these questions yes, read on as we would love to share an inspirational story from someone who has figured out how to change his spending habits and chase an alternative American dream.

Adam Baker is a real world (normal) inspiration for us all. Sell Your Crap. Pay Your Debt. Do What You Love. Watch his inspirational story courtesy of TEDx.

Inspirational, right? Our focus is on helping you make better financial decisions. For us, there are three key messages right at the core of Adam’s story that we all can learn from:

The American Dream

Firstly, we are all taught at an early age that consumerism is a big part of the American dream. That our identities are made more valuable through owning ‘cool stuff’. Many of us consciously or subconsciously increase our assessment of others by witnessing what they own. This has been drilled into our society as natural.  As a result this drives our spending habits. In reality, most purchases become blase days/hours/minutes after we own them. Much as the burst of positive energy associated with most forms of ownership is short-lived. How much better would our bank balances be if we got better at separating wants from needs, or creating the discipline to treat ourselves less often?

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Consumerism Cycle and Debt

Adam described in words the financial journey most of us go through to service our desire to achieve the American dream. You work real hard. You use debt the buy the lifestyle you expect to see early. And then spend the rest of your career financially chasing the cost an ever-inflating lifestyle (see this link for more in lifestyle inflation) plus servicing debt. The result of this is the definition of a vicious cycle that almost guarantees steadily increasing stress levels. Which of course encourages more buying!

Changing Spending Habits

This is, of course, easier said than done. However,  Adam does have some great thoughts on how to start changing our spending habits. I think taking a step back to really understand what actually motivates you is step 1. What are your values are based on? What you want to achieve in your life. Getting that right is an ideal first step as it gives you something to focus on. Use this as a decision-making tool.  Are you buying x as it is required to keep me moving forward or because it helps you/your family achieve a long-term goal? If not, think long and hard about splashing the cash!

Thinking Time

spending habits think

This shouldn’t be about becoming Ebenezer Scrooge, more about creating some room to think before triggering the natural high hard-earned (or debt funded) purchase.

In conclusion, creating some financial discipline and altering your spending habits is the first step you can take to create financial and lifestyle freedom. It’s this freedom which you can use to chase your dreams, not staying ahead of the Joneses.

Did this resonate with you? Are you happy with your spending habits? Is there anything from this you can take into your own life?

James BurnsFounder @ Wealth-Hack
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How Do I Change My Spending Habits?