7 Steps To Seriously Fight Spending Addiction

7 Steps To Seriously Fight Spending Addiction

7 Steps To Seriously Fight Spending Addiction

With the holiday season well and truly over, it’s time to get serious about money. For many, this means taking control of their spending, and subsequently their financial lives, which also means beating an addiction to spending.

Addiction can be characterized by an inability to consistently abstain from harmful behaviour, impairment in behavioural control, diminished recognition of significant problems with one’s behaviors and interpersonal relationships, and a dysfunctional emotional response. Like other chronic diseases, addiction often involves cycles of relapse and remission. Without treatment or engagement in recovery activities, addiction is progressive and can have severely negative long term consequences.

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To help fight the spending addiction that affects so many I have devised a 7 step program which is loosely (extremely loosely) based on the tried and true Alcoholics Anonymous 12 step program. My program has a few less steps and none of the religious references, finance is the only religion I preach.

“My name is _ _ _ _ _ _ _ _ _ and I am a spendaholic.”

1.  Admit you are powerless over spending

This may seem drastic but if you have a history of spending too much then the first step is to recognize there is a problem that, if not addressed, could negatively impact your long term future.

2.  Make a decision to turn your spending and financial life into something to be proud of

Instead of worrying about what has happened in the past, make a decision to move forward using the right approach and be proud that you are on the right track now. You will be surprised in the sense of pride that comes with getting rid of that credit card debt or consistently building an investment portfolio for a purpose you really care about.

3.  Admit to another human being the exact nature of your spending “wrongs”

Create some accountability by talking with someone about your bad spending habits and what areas need improving.

4.  Make a list of all persons that may be harmed, and become willing to make amends to them

This could be as simple as recognizing you are harming your future self (30 years form now) or as sobering as the realization that you are not being fair to your partner or family.

5.  Make a list of spending priorities

Starting with your musts (Food, housing, education, security etc.) and moving down to your wants (holidays and material things). Then decide where the best place for your savings is based on the timeframe and importance of each priority. The table foosball table or jet ski may need to be put on hold for a little while!

6.  Remove temptation

Set up an automatic transfer of funds to the “best place” for your money and put steps in place to make it difficult to access the funds without an emergency or legitimate need. This may involve making an agreement with a friend or family member to talk about any changes in plan. In my experience partners aren’t very good at being the spending road block as they are either part of the problem or don’t want to create more problems by fighting over something like the need for a new couch.

7.  Review your progress and don’t let set backs derail your plan

Take a look at your plan and progress regularly, if you have a slip up or two just get over it an move on!

RELATED: The investment plan every woman should have

I love to see people get excited about investing instead of blowing their dollars! A couple that I help with their finances recently commenced a portfolio that they are calling their “Free Holiday Fund”, the aim of this fund is to get the balance to such a level that they can take holidays using the investment income generated by the portfolio. They are essentially sacrificing a few years of large holidays now for unlimited holidays in the future. Not a bad trade in my books!

What are you going to name your savings account or investment portfolio to excite you about changing?

[author image=”http://www.woman.com.au/wp-content/uploads/2013/11/Jason-HS-Colour.jpg” ]Jason Reynolds has been involved in the financial services industry for close to a decade and is the Director of financial advice firm Action Wealth, which specialises in educating individuals to enable them to take control of their financial lives. He practices “preventative financial advice” with an aim to ensure that his clients avoid the typical financial mistakes that lead to lost and wasted time and money. The firm’s mission is to decrease the average age that individuals seek and benefit from quality financial advice by a decade (it’s currently at 45….) and beyond. [/author]



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