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Budgeting 101

5 Steps To Detox Bad Financial Habits In One Month

We all have some form of bad financial habits.

We all have some form of bad financial habits. It’s always present in our lives, even though some of us may be blissfully unaware of the harm our habits are causing for our financial future.

These habits could include spending more than we earn, not saving enough money when we can, or taking up debt that we can’t afford to pay back.

In today’s article, we will show you how you can detox these bad habits from your system in one month.

Here is our 5-step process on how this can be accomplished.

#1 Know Where Your Money Is Going Into Each Month

It’s going to be hard if you don’t even know where your money is going into each month.

We are not saying you need to know how much you are spending on lunch or dinner each month. It’s okay if you don’t know that. But you need a general picture of where your money is going.

Here are some questions you should have answers to.

What’s your take homepay? Of this, how much do you need each month to cover your basic needs (e.g. food, transport, utility, telecommunication, etc)?

What are your financial obligations? Do you have elderly parents or young children to support? Or perhaps, rental or home mortgage to pay for.

What are your financial objectives? Do you even have one? If you don’t, perhaps it is time to think of some achievable goals.

Ask yourself this, how much are you allocating to each area?

Total Takehome $2400 100%
Basic Needs $1000 50%
Financial Obligations $700 25%
Financial Objectives $700 25%


Find out for yourself where your money is going each month. If there is nothing left at the end of each month to help you achieve your financial objectives, something is wrong.

#2 Stop Spending On Stuff You Don’t Even Want

After you understand where your money is going each month, you start recognising the things you are spending your money on that you do not even want. Even worse, you might be spending money on people you don’t even like.

For example, you could be spending $200 each month on alcohol even though you don’t even like drinking, while hanging out with friends you don’t really care much about.

We could be buying lots of stuff each month that we think make us happy. Nice clothes, new gadgets or expensive meals. Do they really make us happier and contented with our lives? Somehow, we doubt so.

#3 Cut Out Monthly Membership

Do you enjoy getting passive income each month from your investments? Everyone does.

Monthly membership is the exact opposite of passive income. You incur a cost each month, regardless of whether or not you use the services or products offered.

Think of your gym membership, yoga classes, spa packages and newspaper subscriptions. How much have you spent on them over the past years? Do you really need them?

Unless they are absolutely essential, you are better off just cutting these things out of your monthly budget.

#4 Replace Bad Habits With Good Habits

We all have habits, some good, and some bad.

After eliminating the bad habits from our system, it is important to replace them with good habits.

Good habits include making sure you set aside money to invest each month, or saving up to buy big-ticket items, instead of taking a loan. It includes ensuring you have an emergency fund, or to build up one if you don’t already have it.

Read Also: 4 Good Financial Habits To Pick Up In 2016

#5 Surround Yourself In The Right Environment To Be Successful

To be successful in achieving your goals, you have to set yourself up in the right environment. Here are some things you could do.

  1. Download a finance app (and there are many free ones out there) and start tracking your daily expenses. If you are discipline enough to do it for 3 to 6 months, it would give you wonderful insights to your spending habits.

Read Also: 4 Financial Apps That We Have Tried

  1. Read finance websites like By doing so, it keeps you up to date with what’s happening in the financial markets.
  2. If you have bad spending habits, consider keeping your credit cards at home and paying by cash. The act of paying by cash, or having to withdraw money to pay by cash, helps you appreciate the amount you are spending on items.

The above steps might sound simple to follow but are a lot more difficult to carry out. Do yourself a favour. Start today.