5 Bad Spending Habits to Break Before Ringing in the New Year

Are you guilty of staring at your bank statement and wondering where all your money went? We’ve all been there. Small expenses add up; before you know it, half of your monthly income is gone, and you don’t even know how you spent it.

The New Year is perfect for a financial reset. Breaking bad spending habits now can help you start the coming year on the right foot.


Spending Habits to Break for a Prosperous New Beginning

Review your credit cards and bank statements from the last three months, checking if any of these common money-wasters apply to you. Once you identify your problem areas, make a plan to cut back and reclaim control of your cash flow. Small changes today can have a big impact on your finances tomorrow.


1. Impulse Shopping and Overspending on Nonessentials

While these two habits seem the most difficult to break, you can drop them before the New Year with mindful changes.

  • Establish a budget and spending plan: Track your spending to see where your money goes. Look for expenses you can reduce or eliminate. Setting limits will make you think before you buy.
  • Pay with cash instead of cards: Cash makes spending feel “real.” It’s more difficult for many people to hand over a $20 bill than swiping a card.
  • Unsubscribe from marketing emails and sales alerts: As they say, “Out of sight, out of mind.” Messages from e-commerce stores may tempt you to buy stuff you don’t need.
  • Find alternatives to shopping: Swap your impulsive shopping tendencies for exercising, socializing, reading, or creative writing. Fill your time with meaningful activities to avoid shopping out of boredom.
  • Postpone your purchase: If you’re shopping at a store, put it back on the shelf. If you’re shopping online, remove it from your cart and add it to your “Saved For Later” items. If you keep thinking about it after a few days, you may go back and buy it.
  • Ask yourself if you really need it: Think about the item’s purpose and how often you will use or enjoy it. Question every purchase and spend on what matters.


2. No Savings Goals

If you don’t have savings goals, your money will disappear each month with nothing to show. Here’s how to turn your situation around:

  • Set specific targets: Put a percentage of your income, like 20-25%, toward monthly savings. If doable, break that down into smaller milestones, such as saving an extra $20 or so per week.
  • Reward your progress: As you achieve your savings milestones, reward yourself to stay motivated. Keep the rewards small but meaningful, like your favorite pastry or a nice bottle of wine to enjoy with someone you love.

Further reading: Why Saving Matters: A Look at the Ten Consequences


3. Using Out-of-Network ATMs

Withdrawing cash from out-of-network ATMs can damage your bank account balance over time. Those pesky fees, while small, add up quickly, causing you to spend a small fortune to access your own money.

Your bank’s ATM network includes thousands of fee-free cash machines. Do a quick search on their website or mobile app to find nearby ATMs. You can also open a bank account with nationwide ATM access and reimbursement of fees, so you have more options when you’re in a pinch. Some credit unions and online banks offer accounts with ATM fee rebates and widespread free ATM networks.

Make it one of your New Year’s resolutions to only use in-network ATMs to avoid unnecessary charges. That money would be better served paying off debt or earning interest in your savings account.


4. Overspending on Junk Food

We all have our vices, and junk food may be one of yours. Adding chips, candy, and soda to your weekly groceries provides little to no nutrition for the money spent. Here are ways to cut back on your junk food expenses and shift your focus toward good nutrition:

  • Stock up on healthy snacks: Junk food is more than an indulgence; it can be an addiction that keeps you craving and spending more. Granola bars, nuts, and fresh fruits are more filling and cost-effective.
  • Buy in bulk and portion snacks into single-serve containers: Instead of finishing a big bag of potato chips in one sitting, this tip makes it easier to limit yourself to one serving and avoid mindless snacking. 

Your health and budget will benefit from dropping this bad spending habit. Focus on fueling your body with nutritious options and avoid overpriced, low-quality snacks.


5. Automatic Bill Payments

Do you pay your bills on autopilot each month? While paying on time and in full is commendable, you could be losing money unknowingly. Automatic bill payments may also lead to overdrafts or insufficient funds, causing fees. Moreover, they risk neglecting discrepancies, and canceling or adjusting payments can be tedious.

Make it a habit to examine your billing statements as soon as you receive them, ensuring all the charges are correct. If something is amiss, you have enough time to file a dispute.


New Year, More Money

Breaking old habits is hard, but your future self will be grateful for the extra money in your bank account. Rather than feeling guilty about past spending, focus on developing better habits and a smarter budget going forward. With some mindful adjustments, you’ll be amazed at how much you can save by this time next year. Cheers to a prosperous new year!


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What are you waiting for? If you have unused luxury items sitting around, visit us in Scottsdale or Chandler, Arizona, to turn them into extra cash before the ball drops! You can also send us your item’s details here for a quick online appraisal.