Harris: How to survive a financial breakup

By Charlestien Harris, Retired Financial Coach at Southern Bancorp

I know this month is known as the “love” month, but if we are being realistic, breakups happen during this month as well. Breakups are sometimes easy, but other times they can be very difficult and heartbreaking. 

Just like relationships, we all have financial habits – some good, and some not so good. Breaking the bad financial habits we’ve developed can be very beneficial in keeping our finances in order. Overspending or accumulating more debt is avoidable, and there are practical ways to address these financial issues. 

The suggestions below may help you break up with some of the bad financial habits you’ve developed over time.

1. Know your own spending habits.

Nobody knows you better than you. Study your behavior to learn what makes you spend impulsively. Review your bank and credit card statements to get a sense of your discretionary spending habits. Pay close attention to purchases you regret, or impulse buys you barely remember making. Take note of any patterns that rise to the surface. Once you identify your triggers, you can develop a strategy to combat them.

2. Try using the envelope method of spending.

Spending is an everyday occurrence and a necessary part of life. The envelope method requires you to fill envelopes with cash according to the budget categories you’ve created and to avoid using credit cards or credit accounts. It’s well-documented that using cash can help reduce spending because interest and additional fees are not added to the cost.

3. Monitor your spending with your mobile banking app.

When it comes to tracking your spending, your mobile banking app can be your best friend and a powerful financial tool. You can set up auto-savings, or move money into your savings accounts at regular intervals to stay on track with your goals. A mobile banking app allows you to check your balance anytime, from anywhere, so you can review your finances before making a purchase. This is one tip I personally use. Monitoring my spending in real time helps me limit what I spend and avoid costly overdraft fees. I still budget now that I’m retired!

4. Unsubscribe and unfollow social media influencers and online retailers.

Remove the temptation to overspend by unsubscribing from marketing emails and unfollowing influencers who promote excessive consumption. Social media can influence your spending by constantly presenting new products, “must-haves,” or enticing trial offers. Marketing emails can also arrive fast and frequently, making you more likely to consider purchases or subscriptions.

5. Try eating out less and cooking at home more.

Eating out can be a major budget breaker. Breaking the habit can be difficult, but not impossible. Whether you realize it or not, we pay a high price for convenience. One solution is to cook at home more often than you eat out. Start planning your meals at least a week in advance so you can buy what you need at the grocery store, making it easier to choose cooking over takeout. Cooking at home and planning ahead can significantly reduce your spending in the food category of your budget.

6. Try to eliminate the habit of making late payments.

Late payments can result in fees or negative marks on your credit report. If you’re repeatedly making late payments, first assess why it’s happening. Keep track of payment due dates, and consider setting up online bill pay to streamline the process and avoid late fees. Save your receipts, or have confirmations emailed to you. You may also be able to stagger your bill payments by negotiating due dates with creditors.

7. Make more than the minimum payment to reduce your debt.

Always try to pay more than the minimum on your debt payments. If you’re considering new debt, ask yourself whether you can truly afford the expense and whether you really need the product or service. Focus on adopting a “no more debt” mindset so you can aggressively pay down what you owe instead of accumulating more.

Bad money habits can be difficult to break and may hinder your ability to reach your financial goals. To overcome these habits, it may be helpful to establish systems that encourage good habits and make excessive spending harder. Remember, you don’t have to shake bad money habits on your own – and it can be challenging to recognize them without an outside perspective. That’s where financial professionals can help. They can offer checkpoints, insights, and advice that help you identify the habits that may be slowing your progress. The right guidance can empower you to make more prudent financial decisions, so you can stay on track with your big-picture goals.

Southern Bancorp has licensed financial counselors on staff who are ready to assist you with your financial questions. To access a counselor, contact your local branch for more information.

For more information on this and other financial topics, you can email me at charlestienharris77@gmail.com or write to me at P.O. Box 1825, Clarksdale, MS.

Until next week – stay financially fit!

Charlestien Harris is our financial contributor, a retired financial coach at Southern Bancorp.