Financial Reflection: Identifying and Overcoming Poor Financial Habits

As we are approaching the end of the year, this is a good time to reflect on the financial decisions you've made throughout the year. Where did you spend your money the most? What did your habits look like? What could you have done differently? Reflecting on such questions allows us to strategize and find new ways to increase our financial health going forward.

Financial reflection helps us see where we may struggle the most. Knowing your habits and where you struggle the most is crucial to your financial growth. When we don't reflect on our financial habits, it becomes more challenging to overcome them. Knowing your habits helps to create a plan to shift your habits and walk in financial freedom.

Knowing Your Habits:

Here are a few poor financial habits that many people struggle with. This list is to help you identify your habits, so that you can find the best solution for your financial growth.

• Borrowing Habit: Some may not realize that a savings or spending habit isn't their core issue, but it could actually be their borrowing habits. If you are consistently borrowing from family members and friends, or consistently taking out loans, this would make it extremely challenging to save anything. Also, with borrowing comes debt. And as long as you continue to build debt there is no true financial freedom. One way I've learned to overcome this habit is by picking up a delivery driver gig. Instead of borrowing, I go out and do deliveries if I need extra cash. Door Dash, Instacart, and Uber are always hiring for drivers. If you don't have a vehicle, picking up a seasonal gig or part-time job can be helpful, which is something I've also done. The habit of borrowing must be broken if you want to obtain true financial freedom. Additional streams of income and discipline can help with breaking this habit.

• Emotional Spending Habit: I may not always be an emotional spender. However, I did have a recent season in my life where I had a bit of a traumatic week and spent so much money to cope with my emotions. Once it was all over, I regretted the emotional spending, and it definitely wasn't worth the financial chaos that soon followed. Choosing other ways to cope with emotional distress such as music, watching a movie, journaling, taking a walk, or in my case, a small affordable treat, could have helped. Recognizing triggers of emotional spending can help you come up with alternatives.

• People Pleasing or Giving Habit: Some people have a habit of giving too much. Givers will go out of their way to ensure others’ needs are met before their own. Givers tend to end up in a financial bind trying to get others out of one. I had to learn that it's okay to tell people NO. That word is going to be your best friend when trying to overcome pleasing others through giving. Once I started saying NO, I realized that people oftentimes ended up okay, or figured it out. Choose to no longer take others out of a financial bind at the expense of you ending up in one. If you can truly afford to give, that's fine. It's a blessing to give. But if you don't have it to give, it's okay to say NO. When you're in a bind, there may not be anyone available to save you. You have to save your own money so that it is available to save you when needed.

• Savings Habit: Many times, we may feel we can't afford to save, but oftentimes when we assess our spending habits, we find that there was something that we didn’t have to purchase or there was an expense that could have been cut to help us save. You must also have a realistic savings goal. If you can only afford to save $5 a month, then save $5 a month. The goal is to create the healthy habit of consistency. If you become consistent with saving $5 a month for at least 6 months, this habit will begin to stick and before you know it, you'd have more money saved than you could have imagined. You may even find it easier to save more once you've practiced saving a little.

• Spending Habit: While this may not be everyone's core habit, many of us know this habit far too well. When assessing your spending habits, you would want to pinpoint where you are spending your money the most. Knowing where your money is going can help you make adjustments in that area. For me, I've spent too much money on lunch at work and Starbucks. Now that I am aware of this, I can make the adjustments and find alternatives for lunch so that I can keep more money.

Extra Tip: Mental Health Matters

When your mental health is not where it needs to be, it can affect your financial health. When you are unable to think clearly, and your mind is cluttered and clouded, you do not have the right mindset needed to think about budgeting, prioritizing, or making sound and wise financial decisions. Be sure to take care of your mental health so you can have the mindset needed to obtain financial freedom.

Choose Discipline

Having discipline is what enables you to execute the changes needed for financial success. Discipline can be challenging but it is crucial when creating any type of change. Discipline is necessary. It is key in overcoming poor financial habits and taking your finances to the next level. It may seem challenging, but it is possible. When you become disciplined and make the change, your bank account will thank you. It's worth it. Choose discipline.

Question? How can reflecting on your finances this year help you make wiser financial decisions next year? Let me know in the comments.

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Discipline Is Key🗝️

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