Shopper’s guide to bad spending habits and how to break them

Do you often go over your budget or impulsively spend money on unnecessary things? These are just two signs of having a difficult relationship with money.

Many people are bad at managing their money and there are many signs to look out for that mean you have bad spending habits. Let’s take a closer look.

The following are generally signs of unhealthy money habits:

• Not having a set budget or plan
• Dipping into savings when you don’t need to
• Having debt that you haven’t paid off
• Not having a set savings goal.

Another consideration is emotional spending. We are all guilty of splurging on things we don’t really need in the heat of the moment, which is okay on occasion but can be a problem if it happens often.

Let's consider some of the signs of emotional spending:

• You return a lot of what you buy
• You’re buying to compete with others and to reduce FOMO (fear of missing out) on a popular/trendy product
• You spend more than you can afford or take money out of your savings to buy something
• You shop because it makes you feel good.

Unsurprisingly, emotional spending was at an all time high during the pandemic, as reported by the American National Library of Medicine. MyState Bank in Australia similarly found that more Aussies have been spending on themselves impulsively even during higher living costs. This, too, can lead to significant regret.

So, if you recognise any of these emotions or the listed signs above, there are things you can do to help break your bad habits.

Ways to overcome your bad spending habits

It can be hard to break bad habits but it’s possible. Here are some things you can do to help:

• Create a monthly budget. If you need help with this, we have a budget calculator that can help.
• Before buying something, step away and consider if you really need it. Once the moment has passed, you might realise that you don’t actually need it.
• Make sure you have savings in case of an emergency and don’t touch this money unless you have to.
• Set aside a monthly budget for shopping for non necessities
• Delete shopping apps and unsubscribe from newsletters to reduce the temptation.

At Mozo we like to help readers get on top of their finances and better manage their spending. One way to tackle this is to be a more thrifty shopper. So for smart shopping tips and even information on upcoming sales, why not start with our Online Shopping Hub.

If you want to start building your savings, check out the rates on high interest savings accounts below.