Here’s how to break your harmful financial habits

Our biggest obstacle is often ourselves. Just consider the plans you set at the beginning of 2022 to reach your goals. Did you go to the gym? Start saving for retirement? Read that book? Or did you sabotage yourself through procrastination, perfectionism, negative self-talk, or fear of failure? Self-sabotage does not only stop you from reaching your personal goals but your financial goals as well.

Whether it’s not paying accounts on time or buying those shoes that you definitely don’t need – financial self-sabotage comes in many forms. Societal trends, consumer pressures, and a lack of discipline can keep us in a place of financial lack. But you know what? You’re not alone! We’ve all been our own worst enemy at some point.

The good news is that you can end financial self-sabotage by applying our top 5 tips.

1. Plan, plan, plan

“A goal without a plan is just a wish.” Antoine de Saint-Exupery. When you have short-, medium- and long-term financial goals, having plans to reach these goals means you are more likely to achieve them. No plans = no direction. No direction = no action. No action = Financial self-sabotage.

2. Create an honest budget and adhere to it

Having a budget is like having an eating plan. If you adhere to it, you will see wonderful results. If you ignore it, it’s just another piece of paper. Creating an honest budget and sticking to it is fantastic because you have a realistic view of how much you have and how much your monthly expenses are. Knowing what comes in and what goes out allows you to make the best financial decisions for where you’re at.

3. Avoid debt where possible

Having debt to build a credit record isn’t bad but incurring debt to sustain a lifestyle you can’t afford is not a good idea. Stick to buying things you can afford right now (consult your budget) because repaying in instalments over a long time will be more expensive and put strain on your monthly budget. If you can’t afford it and still really want it, save until you can afford it.

4. Get rid of the “I deserve this” mentality

When we work hard to build a better life, it’s only natural to want to reward ourselves. But instead of satisfying this need with something you can’t afford right now (which will only make you feel worse about your financial situation), plan and save up for rewards. You could even consider non-monetary rewards like a hike in nature, taking a nap, journaling, or watching your favourite TV show. Remember, instant gratification under financial strain is not the way to happiness.

5. Prioritise saving

Making saving a priority in your life will give you greater security, allow you to enjoy your life, and give you the financial freedom so many are searching for. It also helps you achieve your financial plans and goals much quicker and easier.

Today, you can choose between financial self-sabotage or financial self-support. We hope you will choose to support yourself to reach your financial dreams by applying these sound financial principles.

Need help?

Having an expert independent fund administrator like mCubed on your side will help you find financial freedom by having a balanced retirement plan that considers your circumstances, obligations, etc. As a member, client, or participating employer of one of our retirement funds, you have access to the best investment administration and advice, excellent service, and complete transparency for the best long-term results. Our fund-appointed FAIS accredited financial advisors are here to ensure a safe, financially sound, and prosperous retirement for you.