Live within your means

Fix Bad Money Habits in 4 Steps and Embrace Living within Your Means

4 Steps to Fix Bad Money Habits and Embrace Living Within Your Means | www.TheHeavyPurse.comOn Friday, I shared an infographic on Bad Spending Habits and How to Fix Them, and I started thinking about living beyond our means. It’s a common problem and one, deep down, we know isn’t good for us. So why do we do it?

Debt or Diet. Easy to Fix and Harder to Implement

Becoming financially healthy is a lot like getting in shape. We know that we need to eat plenty of veggies and fruits, cut back on sugar and fat and exercise if we want to lose weight. Yet, we don’t. It’s the same story with getting financially healthy. The solution is simple: Eliminate debt, stop spending money you don’t have and live within or below your means. And just like people yo-yo diet and lose and regain weight all the time, people fall in and out debt regularly too.

4 Steps To Fix Bad Money Habits Permanently

Debt is just one symptom of bad money habits. While it’s certainly something you need to address and eliminate, there are a few steps you need to complete first, if you really want to permanently break your bad money habits. They didn’t don’t form overnight, and there is no magic pill or solution to make them disappear either. Success lies squarely on your shoulders, and you will need to make a conscious effort to change and/or remove some of your long-held money habits and beliefs before you can get rid of debt.

Step 1: Recognize that You Need to Make a Change and Commit

This seems obvious, but if you don’t honestly believe that you need to change and commit to doing the work, you don’t need to bother with the other steps. The first step is where most people fail. They either don’t believe there is a “real” problem or they are unwilling to do the work to get their financial house back in order. You need to take ownership for your situation and commit to changing it. No one else can do it for you. My friend, Grayson, at Debt RoundUp wrote a great post on changing your money mentality. If you still find yourself struggling, ask yourself why.

Don’t feel ashamed that the thought of losing friends or disappointing your children scares you. But also don’t let it stop you from doing the right thing. Your true friends will support your efforts, even if it puzzles them initially. And your children’s lives with be 100% better because you got out of debt and demonstrated good financial behavior to them. If you feel any resistance, keep asking yourself “why” until you discover what is really holding you back.

Step 2: Identify Your Emotional Triggers to Curb Mindless Spending

Most money mistakes have an emotion behind them. Anger from getting passed over for a promotion led to buying a big-screen TV. A break-up led to weekend in Vegas. Boredom led to an all-day shopping spree. You know the drill. We’ve learned to quell our emotions through spending. It makes us feel good, at least temporarily. Your next step is to recognize when your emotions are controlling how you spend your money.

One way to help determine this is to ask yourself: “Is this something I truly need or am I feeding an emotion?”

Notice that I used the word, “need”. Most emotional triggers are buy right now moments, so if you use “want” over “need” – then the answer will almost always be “yes”. Slow down and figure out if this something you need or if you’re trying to soothe an emotion by buying something.

Remember, emotions are not bad. We certainly don’t want to stop feeling, but we do want to stop letting them drive our spending habits.

Step 3: Forgive Yourself for Your Past Money Mistakes

This is a place where a lot of people get stuck. They spend countless hours, days, weeks, months and even years beating themselves up for their past money mistakes. Please stop. It’s important to understand the reason behind those mistakes (i.e. your emotional triggers) but berating yourself doesn’t help. In fact, you’re wasting energy on something you cannot undo when you should instead use that energy to propel your life forward. Accept responsibility for your mistakes, forgive yourself and move on.

Step 4: Create a Get out of Debt Action Plan and Follow It

Now you’re in a place where you can tackle your debt. You have the commitment to do the work, have control over your spending, rather than your emotions and have forgiven yourself for past mistakes. So let’s get started.

A New, Improved Perception of Living Within Your Means

When you are accustomed to a lifestyle funded by credit cards, it can be a bit sobering to imagine what life must be like when you start living within your means. You imagine it’s dull and boring. You say “no” more than “yes”. It sounds kind of awful. Well, it isn’t.

It’s quite the opposite, in fact. Now you live on your terms, not your creditors terms. You spend money on what truly makes you happy and save for it. You enjoy your vacation or big screen TV without that nagging sensation that you’re about to fall off your own fiscal cliff. You don’t lose sleep worrying about paying bills because you already paid them in full. You realize that living within your means is the good life you always wanted.


The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

Leave a Comment


  1. Monday, January 27th, 2014
    I like to focus on creating one positive habit at a time, especially for people who are just starting out. I think it can be a huge mental benefit to immediately see something good happening rather than first focusing on trying to correct the bad things, which can be a real downer. As you say, the emotional part is really important here so any win you can get to start off is a big help.
  2. Monday, January 27th, 2014
    This is a great post Shannon, and I am a HUGE fan of financial fitness. When I first put clients on budgets or "lifestyle changes" they think it is going to be an awful existence having to say no or change the way they do things. But they actually realize the opposite. They have more clarity in life, they realize they can achieve more life goals and they remove financial stress they didn't know they had.
    • Shannon
      Monday, January 27th, 2014
      Thanks, Shannon! Yes, my clients are the same way. The imagine how awful it will be to say no and not buy everything they want. And admittedly, it is hard at first but once they began to see the benefits, they love it. Things do become much more clear and they begin to prioritize what they really want in life, which sadly too few people really do. Life without debt and the financial stress it brings really is amazing.
  3. Monday, January 27th, 2014
    Great points Shannon! I think they're all important, though I think #1 and #2 are so vital to see true sustainable success. Whatever the financial issue, it's likely going to take a lot of hard work to reach it and if you're not committed to change it'll be difficult to reach. Those emotional triggers are important to watch out for as well so you can identify them and make wiser decisions.
    • Shannon
      Monday, January 27th, 2014
      Thanks, John! We are always so quick to jump to get out of debt stage. If we don't really have that commitment, it will be so much harder. And like you said, to have sustainable success. You may get out of debt, but you'll definitely have a much higher chance of falling back into old habits if you really haven't changed your money mentality. It is amazing how our emotions drive our spending, and most of us aren't even aware we let it happen.
  4. Monday, January 27th, 2014
    Perfect post Shannon. Thanks for the mention as well. Though I like to push a lot about changing the mentality, you bring up a good point about forgiving your past mistakes. If you dwell on them, you will never be able to move on.
    • Shannon
      Monday, January 27th, 2014
      Thanks, Grayson! Appreciate your kind words. I loved your post last week too! Yes, I see so many berate themselves 24/7 for their past money mistakes. As good as it is to recognize our mistakes and learn from them, dwelling on them is not good. People stay perpetually stuck, which isn't any better than having debt.
  5. Monday, January 27th, 2014
    THIS is the most important step, I think: "Forgive Yourself for Your Past Money Mistakes." It's partly why I hate when people dwell on student loans and try to think of how they could have gotten through school without debt, etc. In all honesty it's more important to look at the present and future than it is to dwell on the past.
    • Shannon
      Monday, January 27th, 2014
      Thanks, DC! I agree. It makes me sad when I see people constantly berate themselves, especially with student loans. Yes, in hindsight, there are choices they probably wish they had made differently, but that is also a reality of life. We all have 20/20 vision when we look back. All we can do is use our newfound knowledge to help ourselves make more informed decision going forward.
  6. Monday, January 27th, 2014
    You are so right. One of the steps in accepting responsibility for your debts and making changes is to forgive yourself and let it go. We spent about a year rehashing all the things we did that got us into debt. Some were very impulse decisions, some were taking risks to operate a business, and some were just spending because we wanted things. Really all of those things happened in a very short period of time - about 4 years - but we still needed to forgive ourselves and each other and so that we could move forward and repair the damage.
    • Shannon
      Monday, January 27th, 2014
      Yes, I truly believe in order to successfully get eliminate debt and not get back into debt is accepting responsibility and forgiving yourself. Some people think it's just a temporary issue so they keep getting in and out of debt. While others just can let go of their money mistakes. You have to learn from your mistakes, which it sounds like you and your husband did, and then move forward. It's hard to take action when you're using all your energy to mentally torment yourself with past mistakes. I'm glad you and your husband are past that and working towards your financial freedom.
  7. Monday, January 27th, 2014
    I am so happy that we no longer rely on credit to supplement our spending. Life without debt is soooooo much better. Great post, Shannon!
    • Shannon
      Monday, January 27th, 2014
      Yes, it is! People think they are living the good life when their extending their lifestyle via their credit cards. If they knew … right?
  8. Monday, January 27th, 2014
    Sticking to our plan has been huge for us. Not easy - but crucial. On the days we want to give up - and there has been many - we just commit to sticking to our plan for the day. By the next morning we usually feel much better. Great post, Shannon!
    • Shannon
      Monday, January 27th, 2014
      Thanks, Laurie! Oh yes, sticking to the plan is so important. And to also recognize some days will be very easy while other days you just want to give-up. Like you said, if you just give your self a little space, you do feel better and refocused.
  9. Monday, January 27th, 2014
    Great post Shannon. For me, #2 really hits home and was/is a major stumbling block. I still fight the temptation to buy consumer electronics when I'm a bit in the dumper emotionally. I have learned over the years that the small pick-me-up you get just isn't sustainable and leads to some very unjustified debt.
    • Shannon
      Monday, January 27th, 2014
      It's so easy to get in the habit of buying something when we're having a bad day or a tough time. It's one the hardest habits to break I think and one of the many reasons I always advocate having goals. It's my barometer and helps me identify when I'm leaning towards making an emotional purchase. I'm glad you figure out how to break your habit, Kyle!
  10. Monday, January 27th, 2014
    I really liked how you numbered these because, for me, a lot of it was the emotional (forgiveness, figuring out the triggers) and mental (with the berating). Once those things were resolved, then the logistical (#4) came a lot easier. And if I'm being honest, I suppose they aren't 100% resolved, but they're at least at a higher percentage of resolution than it used to be, so I suppose it's all about moving forward even if it means some minor regressions!
    • Shannon
      Monday, January 27th, 2014
      I really believe you have to take care of #1-3 for the logistical to become more manageable. Otherwise not only are you more likely to fall back into bad habits again, your progress will be slower between berating yourself and still struggling with make confident money decisions. I'm not sure if we can ever 100% resolve all of our past money habits, but knowing that they exist and recognizing when we're letting them control us is a huge victory.
  11. Monday, January 27th, 2014
    Totally agree with your first step. Without owning the fact that debt has become a problem, it will be very hard to change. And also step 3, being able to forgive yourself is a big one.
    Taking the steps to get out of debt can be hard, but it's so worth it. Financial freedom is a great feeling.

    Have a great week!
    • Shannon
      Monday, January 27th, 2014
      Yes, a lot of people like to cast blame on everyone else and not take responsibility for their own actions. Being in a debt doesn't make you a bad person, but you do have to ownership for your actions and decisions and understand the consequences of your choices. Forgiving yourself is often overlooked but necessary. We spend so much time and energy feeling guilty and angry over something we cannot change. Financial freedom is truly worth all the effort. You have a great week too, Corinne. Hope you are finally feeling better!
  12. Monday, January 27th, 2014
    Emotional spending is definitely a thing I try to be aware of, but I'm sort of lucky that I was forced to break that habit. I grew up in a family where my grandmother and my mom both consider shopping just "something to do." My grandmother is pretty well off, so I suppose it can actually be a hobby for her, but my parents aren't. Nonetheless, my grandma taught my mom that habit and she taught me - that when you're bored, shopping is a totally ok activity to fix that.

    At least I managed to break that habit when I went to grad school in England. Nothing will scare you into keeping a budget like possibly be stranded in a foreign country with not enough money if you're not careful. I still remember how it felt when I was bored on weekends and just desperately wanted to go shopping - especially in a new country where everything was a little different. But sheer terror of homelessness abroad made me realize that streaming TV shows, going to the library, walking all the different hiking paths in the area and studying were much better uses of my money... and they didn't make me freak out that I was overspending.
    • Shannon
      Monday, January 27th, 2014
      So many consider shopping as a "hobby" or something to do to kill some time. It seems so innocent, but unfortunately it isn't in most cases. Yes, I can imagine living in a foreign country and trying to make sure your money lasts, will curb some bad money habits! :) The initial stage of cutting back is the hardest, but once you begin to adjust, it can actually be a far more fulfilling way to live, especially since the money you do spend is on the things that really mean something to yo u. Thanks for stopping by, Mel!
  13. Monday, January 27th, 2014
    As always, great article Shannon. Although I'm far from perfect with spending, I do take more time thinking most purchase through. For instance I'm kind of "over" all this 1/2 marathon training and was thinking I wanted something completely different so I browsed through living social and groupon to look for fitness classes, and although I found "good deals," I remembered that I bookmarked some other free and awesome home workouts from the internet that I could certainly try first. I think if most people just took a moment to pause, they can avoid most mindless spending.
    • Shannon
      Monday, January 27th, 2014
      Thanks, Tonya! I don't know if anyone is "perfect" on spending! :) But it sounds like you're doing a great job with slowing down and making mindful choices, which is all we can do. I agree if that we took a moment to think through our purchases a lot of items would never make it to the cash register. :)
  14. Monday, January 27th, 2014
    I think letting yourself move on from the past is a pretty big step . I think a lot of us are extremely critical of ourselves. Letting go of the past frees up a lot of space and energy for making positive life changes be it weight and/or debt.
    • Shannon
      Monday, January 27th, 2014
      Yes, we are sometimes our own worst enemy! We need to forgive ourselves and let go our guilt so we can let in all the positive things ready and wanting to enter our life. Debt is a heavy weight but so is guilt. Time to let go and be grateful that we're creating a better live for ourselves and family.
  15. Monday, January 27th, 2014
    I think #3 is so very important. It's easy to sit back and wonder what if or look at how much money you'd have now if you had only done x or y differently. It really doesn't matter as long as you are on the right track now. Let it go!
    • Shannon
      Monday, January 27th, 2014
      I agree, Kim. Let it go! We can play "what if" all day but it doesn't make a difference. What only matters now is the decisions you make. So let it go and move forward in a positive direction. :)
  16. Monday, January 27th, 2014
    "Identify your emotional triggers to curb mindless spending". Yes, yes, yes. I can definitely speak from experience on this one. My forays with emotional shopping were never because I was happy, but because I was sad and/or upset. Knowing this, I try and find other things to do, when faced with a feeling of "needing to shop".

    Great post, Shannon :)
    • Shannon
      Monday, January 27th, 2014
      I'm so glad you recognize your emotional triggers now, Mackenzie. We all have them. Every single one of us. But knowing what they are and having some sort of defense lined up to replace that desire to shop is so important.
  17. Girl Meets Debt
    Monday, January 27th, 2014
    "Step 3: Forgive Yourself for Your Past Money Mistakes" - I am SO hard on myself. Even though I know how well I've done this past year, I still get hung up over how foolish I was with money in my 20s. Now that I'm 30 I'm much more financially wise. Good thing 30 is the new 20. ;)
    • Shannon
      Monday, January 27th, 2014
      It is incredibly easy to get hung up on past mistakes. We all make them and the most important thing is that you have changed your money habits now that you are a wise 30-year-old. :) You've done an amazing job eliminating your debt and that is what you need to remember! Now you're helping others confront their debt and know they can eliminate as you have/are doing!
  18. Tuesday, January 28th, 2014
    When I was having issues with my finances I really bogged down in Step 2. I didn't realize many times my emotions were getting the best of me. Something negative would happen during the day and I'd feel the need to go spend to make myself feel better. It took quite a long time for me to recognize what was going on there. Still to this day I have to fight that urge to spend when life gets a bit depressing.
    • Shannon
      Thursday, January 30th, 2014
      Emotional shopping is a minefield for sure. Often times we don't even realize we're guilty of doing it, but it's easy to get into the habit of "treating" yourself when you've had a bad day. I have to fight off these urges too, although it's a lot easier now that I am aware of how my emotions affect my money decisions.
  19. Tuesday, January 28th, 2014
    The emotional triggers part is the biggest struggle for me to this day. I still occasionally get the "I have been working hard.. I deserve a reward" feeling..
    • Shannon
      Thursday, January 30th, 2014
      Me too, Jefferson! I think everyone has those moments. The good thing is we now know how dangerous the "I earned it" mentality can be and ironically actually prevent you from doing the things you truly want with your hard-earned money.
  20. Tuesday, January 28th, 2014
    Emotional and habitual spending are two of the places I think a lot of people struggle. Mostly because it's hard for them to identify the habit as something unnecessary.
    • Shannon
      Thursday, January 30th, 2014
      I agree, Stefanie. So many don't even realize they do it and how it can negatively affect their finances. Once you be aware, it becomes a lot easier to break the habit.
  21. Wednesday, January 29th, 2014
    I think step 3 is really important about forgiving yourself for past money mistakes. It's hard to forgive yourself especially if you have a lot of regrets about finances. But by not doing so, you're essentially wasting valuable time where you could be taking action and sorting things out! Great post Shannon!
    • Shannon
      Thursday, January 30th, 2014
      Thanks, Hayley! Forgiving yourself for past money mistakes isn't always easy but must be done. Otherwise, you're just spinning your wheels and not moving forward. Learn and let go - that's all you can do!
  22. Wednesday, January 29th, 2014
    I always get stuck on the emotional triggers part. I think it's one thing and will be mindful of that trigger/behaviour and something else will crop up. It's a like financial whack-a-mole. ;-)
    • Shannon
      Thursday, January 30th, 2014
      Very true, Lindsey. We often have more than one emotional trigger, so we do need to be mindful that other emotions beyond the ones we identified can cause us too spend too. It really can be a financial whack-a-mole! :)
  23. Wednesday, January 29th, 2014
    Great tips Shannon! I needed to create a plan to track all my expenses, just last week I made a very bad decision and until now I kept regretting about it.
    • Shannon
      Thursday, January 30th, 2014
      Thanks, Clarisse! I'm glad you're going to start tracking your expenses as it really can be eye-opening and help you make better decisions. We all make some decisions we regret, but it's important to learn from it and move on too.
  24. Wednesday, January 29th, 2014
    One thing I read a long time ago that has stuck with me is to never go grocery shopping hungry. If you've got low blood sugar in the supermarket, that's a recipe for going nuts at the store.

    Also, creating budgets. Every piece of research I've ever read on tracking (finances, weight loss, etc.) shows it works. It's crazy to see at the end of the month, if you actually track it, how much of your money goes towards the little things. All the coffees and snacks really add up.
    • Shannon
      Thursday, January 30th, 2014
      I agree - Budgets really do work. I think sometimes people turn them into a bug-a-boo and make them much more complicated than they need to be. But seeing how you spend your money is the only way you can make changes and make sure you're really spending your money on the things that matter. Too often we spend more on "little things" that are really inconsequential to our lives but eat up a good chunk of money that we could use on the things we truly want and care about.
  25. Thursday, January 30th, 2014
    I'm decent with handling my money and still have to handle emotional triggers. Usually I end up booking a flight some place to visit Peach or some of my friends. Not the most effective, inexpensive way to handle emotions...
    • Shannon
      Thursday, January 30th, 2014
      I don't know if we ever get rid of our emotional triggers, but knowing the exist can help us put ourselves back in control, rather than our emotions.
  26. Thursday, January 30th, 2014
    Great points! Emotions play a big part in carrying bad money habits. You definitely need to want to change, but I think it's equally important to find someone, that will be there for your moral support and help motivate you. It's much harder when your circle of friends are accustomed to and even encourage those kind of bad habits. And if that happens, it might be time to look for some new ones.
    • Shannon
      Thursday, January 30th, 2014
      Great point, Anthony. It makes it so much easier when you have a group of friends or a community to support you and provide encouragement. The hard truth is some of your friends may encourage bad behaviors and you may have to make some hard decisions on whether they fit your new life.
  27. Saturday, February 1st, 2014
    Very important tips Shannon! And they all compliment each other perfectly.

    The easiest thing was to identify the triggers that made me spend but those were the hardest habits to break too.

    And that made it easy to get #4 tackled. There are still times I feel like spending to by an outfit I fell in love with so I just don't go to the store at all when I'm feeling like that.

    I've learned if I go to the store at the end of the day when I'm tired, I'll just get what I need and be done with it to get home and that works, LOL.

    Thanks for sharing these with us! I hope you're having a great weekend!
    • Shannon
      Monday, February 3rd, 2014
      Thanks, Corina! Yes, it seems unfair that it's so easy to figure out triggers but much harder to break the habits. :) I don't think our emotional triggers ever go away, we are just more aware of them and in most situations, can catch ourselves before we pull out that wallet!
  28. Thursday, February 6th, 2014
    I need to focus on keeping track of my spending. I was on top of it but its fallen to the wayside and I know that is hurting me big time.

    I love how you say to forgive your past money mistakes! I think I haven't done that yet and I keep repeating the same thing over and over again! Thanks!
    • Shannon
      Friday, February 7th, 2014
      Yes, you absolutely must forgive your past money mistakes, Arelis. They do not define you! Acknowledge and learn from them and move on. You have so much to look forward to, so keep your focus forward and you can do it!
  29. Tuesday, February 18th, 2014
    Thanks for the tips. This is very helpful. Love reading it.
    • Shannon
      Wednesday, February 19th, 2014
      Thanks, Marissa!
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan