Understanding your spending habits
A habit is something that you do so regularly that it’s almost involuntary—you do not think about habits, you just do them.
With smart spending habits, your money goes further!
If you track your expenses, then your spending habits will stand out.
Below are some examples of spending habits that can affect your ability to stick to your budget and reach your financial goals.
Consider the following questions:
- Do you pay with cash or a credit card?
- How often do you buy food from a grocery store rather than from a restaurant?
- Do you tend to go grocery shopping with or without a list of what you need?
If you have already reviewed the budgeting module and the setting and achieving financial goals module, then you would have created a budget and set your financial goals. You did this by differentiating between your needs and wants while considering the concepts of financial stability and financial security.
Financial stability is the ability to manage financial risks and absorb financial shocks. It provides you with the ability to bounce back from, or withstand, pressure, change or stress related to your finances.
Financial security is the peacefulness you feel when your income is enough to cover all of your expenses. It suggests that you have enough money coming in to cover emergencies and your future financial goals.
When you spend your money, these same concepts are used to guide your decisions.
A budget is your plan for how you spend your money. Your spending habits are a way you put your plan into action. Sticking to your plan can be hard at times. The key is to develop spending habits that will help you balance your spending with your income.
If you have questions, write them down and bring them to your in-person counselling session.