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How to Use a Positive Attitude to Change Bad Financial Habits

If you’ve ever made a promise to change your spending habits, only to break that promise repeatedly, you are not alone. After all, you still have to go past your favorite coffee shop every morning where a delicious (and overpriced) beverage is only minutes from your lips. Throughout the day, your inbox may bring news of sales and special offers from your favorite retailers. And your next travel adventure to bring warmth to your skin and sand to your bare toes is only a few clicks away. It’s tempting to spend, isn’t it?

If you find it hard to change your attitude about spending, you might be interested in learning what scientists are discovering about habits and why they’re difficult to change. However, it’s possible to transform your bad financial habits into a positive attitude about saving more, living frugally, and building long-term wealth.

How Dopamine Affects Spending Decisions

According to research at the National Institute on Drug Abuse, humans have a brain chemical called dopamine that is triggered with pleasure. When it is triggered, it transmits signals from cell to cell and creates pathways for addictions to enjoyable stimuli, such as food, cigarettes, alcohol, sex, and shopping. When we do something that gives us happiness, such as buying the latest smartphone or new, fashionable clothes, our brain receives a dopamine surge. Some of that chemical then moves to the area of the brain where memories are created and stored, causing the brain to positively associate the spending of money with pleasure.

But dopamine doesn’t stop there – it also controls our decision-making and motivation functions. For example, the next time you pass by the neighborhood coffee shop, your brain releases dopamine that causes you to want to stop in for a cup of Joe. This is how our brains cause us to continue behavior that results in a reward. So you visit the coffee shop and make your purchase, which reinforces the memory and positive association. This is an example of how our spending habits start, and why they keep pushing us to spend money on items we don’t need but simply want because they make us happy. Fighting the desire to spend on pleasurable wallet drains means that you must fight neurological wires.

Dopamine Affects Spending Decisions

Changing Bad Habits

While habits are difficult to break, the good news is that you can change them if you understand how to rewire what causes the dopamine surge. By doing so, you can resist the instant gratification of the newest iPhone or $100 jeans, for example, and instead desire the longer-term future reward found in building up savings for retirement.

Consider what researchers have learned about exercise: Exercise psychologists tell us it takes about three weeks to change a couch-potato attitude into an “I-love-exercise” attitude. Every time the couch potato chooses to exercise instead of watch TV, the mindset that has evolved to believe that watching “Dancing With the Stars” is more fun than going for a walk becomes weaker. Over a few weeks of consistent exercise, the dopamine surge tells the brain that exercise feels good.

The same happens with spending habits. Every time you choose to save your money for a future reward, such as a down-payment on a home or sending a child to college, your brain learns that saving is good.

To replace your bad habits with good spending habits, follow these specific steps:

  1. Make a List. To begin transforming bad spending habits, we must recognize what needs to be changed – so be honest with yourself. What do you buy habitually that isn’t necessary? Review your credit card and checking account statements, highlighting everything nonessential, and then create a specific list of things you will stop buying.
  2. Avoid Situations That Cause You to Spend Foolishly. Consider the circumstances around the items on your list. For instance, if you spend too much on the weekends with certain friends, start hanging out with different people who are supportive of a more frugal lifestyle. Or, if you are tempted to stop at the coffee shop every morning on the way to work, find a different route. If you can avoid situations that create bad habits, you can gain more willpower and start replacing them with new healthy habits.
  3. Be Accountable to Someone Else. Share your list of bad spending habits with someone you trust who supports your efforts to change, then ask him or her to hold you accountable. It will be much harder to deviate from your efforts if you know you have to answer to someone else.
  4. Replace the Bad Habits With New Constructive Habits. For example, I am an avid reader, and one of my vices is purchasing books. However, now I have forced myself into the habit of using my local public library, instead of buying books that I read once and then give away or recycle.
  5. Institute a Reward System. To encourage your new habits, reward yourself for reaching specific goals. For example, you might treat yourself to dinner at a favorite restaurant once a certain savings goal has been reached or once your credit card debt is paid off.
  6. Use a Visual Reminder. Keep a small picture that represents your long-term goal in your purse or wallet to remind yourself of that goal every time you are tempted to spend foolishly. To keep myself focused on my goal of traveling in retirement, I have a picture of a Caribbean beach scene next to my computer monitor.

Final Word

If you stumble now and then, be patient and keep a positive attitude – and never dwell on your mistakes. It’s hard to change bad spending habits, but if you are honest with yourself about the pain that overspending is creating in your life, the hardship of learning to change will seem minor in comparison. Cultivating new healthy habits is not easy, but if you follow these steps and are patient with yourself, your reward can be great.

What other tips can you suggest to help break bad spending habits?

Tana DeBoer is a writer, public relations consultant, and former newspaper journalist based in Minnesota. She enjoys finding ways to save money and live frugally and to help others to do the same. When she’s not writing, Tana is at the lake with her family, volunteering in her community, walking with her black lab Hank, or learning how to bake pies (your recipes are welcomed).