Hello, I'm your host, Mr. Chuck, a retired accountant turn truck driver, I reduce my debt in a relatively short period of time. debt reduction to achieve financial freedom takes commitment, confidence, determination, Habits, habits is something we do on a regular basis and don't have to think about it, we almost do it automatically. For example, every morning when I wake up, when I'm at home, I get in the truck, I get dressed, and one of the first things I do is make myself a cup of coffee. So I like to enjoy a cup of latte, a cafe latte every morning, which is espresso coffee, with steam milk, I use almond milk, but that really doesn't matter. And that's my routine. So that has become a habit, the same thing holds true. When spending your money. Sometimes you form a habit that you do on a regular basis, some of these habits may be good, which you should continue to do. And some of these habits may not be as good. When I say good and bad, I'm referring to how it reflects on your finances, maybe you're spending too much money and not even realizing it until it's too late. I'm gonna start out by talking about good habits. And as always, I get this information through articles which I have linked in my show notes. So if you would like to read the articles in full, you can do so. And I encourage you to do that. Types of spending habits, how you do your spending? Where are you do your spending amounts you spend spending in shopping triggers, what causes you to do that? And what you do before and after you spend money. how you spend your money? Do you spend it by using cash or credit card? Or do you only use a debit card and cash or I use only cash. I like to spend everything on my credit card for through reward points or cash backs. I set up automatic payments for any and all bills I can. These are all habits that you could be doing. I pay my bills by hand each month meaning there's no automatic payment set up. I use printable cash envelopes to spend my money by category, I have a separate checking account for different categories of spending in our household. I routinely use reward credit cards at the stores I shop, I never sign up or mess around with lower teeth reward cards. I tend to spend more or less at a store. If I'm shopping with friends. I tend to spend more or less if I'm shopping with my partner, I tend to spend more or less if they're pressed on and on it could go and where you do your spending. Do you do it online? More than brick and mortars? Are you loyal to Pacific stores with any spending where you'd like to spend by use items much as possible? Maybe you go to Goodwill or thrift stores and buy things you may need. I shop a certain store because you have loyalty cards and earn points and cashback with them. Do you tend to spurge more on vacation than I do if you're at home? On and on this goes amount you spend in never spend more on credit cards than I can afford to pay off within the grace period to avoid interest. I have set amount of spending for myself each month. I spend whatever is left over after all my bills is paid. If your all your bills are paid, and you spend the rest, are you saving anything? Perhaps not. That could be a bad habit right there. I tend to have enough to spend throughout the month because I paced my spending. I run out of money to spend before my next paycheck. I come up with an amount I'm comfortable spending for the holidays and I basically stick with that. I know how much I had to spend for the week and I keep that in my head. I write down how much I have to spend each week. I have tried to no spin challenge before here are some the free no spin tractors and on and off we go. And this is all an article. So the point of this is to identify what you are doing. If you're using a credit card solely because you're getting reward points from it, is it really worth it? I've never done that personally, perhaps you're spending too much because your thinking is being offset by rewards. far as I know nothing is getting offset by rewards. You spend 100% of your money to get a percentage and rewards. Does that make any sense? It doesn't to me, so I don't do it. Now I do have a credit card that I use to buy things online. And yes, it does have rewards. And occasionally I use those rewards to buy something, or to reduce the cost of what I'm buying. I do that. But I don't buy things just to get more rewards. I don't buy things just so I can get more miles. So I can fly somewhere on vacation. Because if you just buy and things to do that you're not going to have any money to enjoy yourself when you're on vacation. If you don't trust yourself, what are you doing? Do you hide money from yourself or you don't monitor your checking or savings account? Well, I'm going to start out with the good things. And we're and then we're going to talk about the bad habits. What I just went over was a list of some things to identify what you may or may not be doing. Now let's talk about good money habits. And the main thing here is to do this so that you have your finances under control, that you have an emergency fund set up that you have the savings built up. So when you do want to go on vacation, you have the money to pay for it, and you're not using a credit card, you may use a credit card to book your airfare, or to book hotels, but you have the money to pay it all off. Once your vacation is over. And you're not paying for your vacation for the next two or three years. And then it adds up because you go on vacation again the next year, but you hadn't paid off last year's vacation, you get my point. So here's some things that are good money habits. And the number one auto transfer money into savings. That means every pay day, you have a setup and your checking account, that X amount of money is gonna be transferred to your savings account. Well, how do you know how much to transfer? Well, you need to have a budget, you need to know how much your bills are on a monthly basis. And you need to know when those bills become due. So even if you only transfer $25 a pay into your savings, it will become automatic, and you won't even missed that money. And then over time, you can keep increase in it. But if you have a budget, you know what's due and when it's due, you know how much you can transfer on the average every pay period, it may be$125, it may be $550. Only you can determine that all so if you have done things to reduce your spending for, say, the month, like you took your lunch, you packed your lunch and took it to work and you figure you're saving $2 a day. Two times five is 1010 times four is 40. So once the month is over, transfer $40 into your savings account, because you reduced your spending that money should be there and you can put it in your savings account. And number two is plan your purchases. Instead of making a quick run to the store to buy a few items here or there, or going to the grocery store every Friday and buying them food. A lot of people do that. If you have a list when you before you go to the store on Friday, you may be able to just stick to your list. Avoid impulse buys. Avoid buying things you really don't need or buy and things you really don't need to eat. In my case. I tend to buy cookies and stuff that makes me fatter. I don't need that. So if I don't buy it, I won't eat it. That's this Mate, and that same philosophy goes. So maybe you can reduce your grocery bill by, say 10%. So if you normally spend $100, maybe you can spend $90. Just by sticking to buying what you need for the week when you need it. And don't over buy food because thrown away bad food is costing you money that you don't need to be spending. And the same goes for things you buy online. Before you go online, walk around the kitchen and look what you need. Make a list, go to your favorite online stores and only buy those items that will last you for about 30 days. Don't over buy. Don't buy things because you got a good price on it. buy things because you need them. Number three, save money with substitutions zeroed in on what's important to you and spend the most on those areas. And categories that aren't as important to you consider economizing or fine in less expensive alternative. If you love gore my cheese don't cut back on your gore my cheese. But if you don't care less about kind of peanut butters in your sandwich, get the generic brand. You can save money that way. I buy everything almost generic or store brand. And I can save a lot of money. And that does mean it but i don't buy it. If I don't like it, I'll buy a store brand product. And if I try it out, and that's not as good as what I'm used to, I never buy it again. But then there's some things that is really good that I buy on a regular basis. store brand peanut butter I have no problems with. But other store brand items I don't like so don't buy for pay yourself first. If you want to make sure you're not overspending create a budget, he should always have a budget. But if you want to grow your savings, pay yourself first. And that's number one, set up an automatic transfer to your savings from your checking account. Every payday number one and four are the same item. pay yourself first. This is from Mental Floss back calm, it's an article nine good money habits you can form and there's a link in my show notes. So if you pay yourself first, meaning you put money in your savings account when you get paid every payday, and then you use the rest to pay off your bills. And if you have your bills paid off, and you have the minimum amount that you leave in your checking account covered should be like around$300 $500, whatever would be, then the excess amount that you want to keep in your savings account is money that you can either save or used to buy something that you were thinking about buying. Number two, plan your purchases. Maybe you can set that money aside so that when you get ready to make that purchase, you have enough money to pay for it. And you don't have to use credit, or you have a larger down payment for something so you can borrow less when you do make that purchase. Send your savings into a savings account. Yeah, that's what I said before. If you've been bound by going into work every day, and netting you $50 in savings on lunch, directly transfer the $50 into your savings account, save $20 in grocery by buying these things on sale, and scouring for deals in the store app, put that $20 into counsel and be there when you need it. Save your bonus cash. If you get a pay raise or you get a month or quarterly bonus like I do. And you have a fantastic month freelancer, any side gig and you got extra money. Put a percentage of that in your savings. It's okay to splurge every once in a while. But put that money aside towards your savings goals, whether they're short term goals or long term goals. And that's where having a financial plan is handy. You can look at what your goals are. When you have this extra money if there's such a thing, when you have more money than what you planned on. He can look at your financial goals and you can say I'm going to set this money aside for my retirement, I'm going to put 10% of it in for my retirement, I'm going to put 50% in for my savings for my next big purchase that I'm planning on down at six months from now, whatever it is, save your extra bonus money, save extra money, when you get a pay raise, have a plan for your spare change. That change that's in your pocket, dump it in a jar and earmarked for a specific savings goal. If you empty your jar a couple times a year be surprised how quickly these coins can add up. I do that and I probably take my mason jar in like once a year, and I probably got 30 or $40. I'd done away with that. Because what I've done is set up a separate debit card, a checking account that I put in my weekly money that I need to have on hand. And I did use the debit card, and I just pay exactly what I need to pay. And I bad news. If you're a waitress or a bartender, I use it for tips also. So I've fairly, I might have $10 in my pocket by fairly pay cash for anything anymore. So I have in my budget, weekly amount that's transferred to this separate checking account that I use that debit card on that I use it when I'm away. And I don't have to count for all that. Because already did the money going into that accounts been accounted for. I don't care what I spend it on, I just need to know how much I get left over then the week so that when the next week's amount gets in their house that the total I got it, that amount gets too large, I am not spending at all, I'll reduce what I put in there. And then that money that I reduced it by should be going to a savings account. So that's what I done. To get rid of my spare change. Go lean and one spending category. Trying to generate significant savings in every aspect of your life can make you feel spread thin and deprived. Instead commit to spending less in a Pacific area. For starters go for easy wins. For example, cut back in the area where there's redundant spending. If you recently join a sports league, you can probably next to a gym membership. Or if you go to the gym just to use to pull consider getting the pool pass at a nearby recreation center to say money. You can also start in spending areas where you have an easier time savings. Let's say you're a weekend warrior who lives for a Sunday brunch with pals. But your aren't terribly picky when it comes to what's stocked in your fridge. And that case, start by saving on groceries that month. And don't worry about cutting back on eating out for the time being. Again, a budget will help you identify which areas of your life where you may be overspending, and you may be able to reduce your spending in those areas. If you put it down in black and white, where you can see it is gonna make your decisions a lot easier to determine where you may be going wrong. And number nine, track your financial progress. Every month, look at your beginning and ending balance in your savings account. How much were you able to save for the month? Was it $10? Was it $1,000? What did you do to save that amount of money? What can you do in the future to increase that amount? That's what tracking your financial progress is all about. Small changes can make a big difference in your financial health. Hopefully the good habits you picked up some good information like what to do with your spare change, what not to do things like that. And my last article is mostly bad habits that you may or may not have. But how do you know it if you don't know what they are? This article kind of confused me because it's titled 11 good financial habits, tips for monetary success. But yet everything he talked about best financial habits for success. But they talk about is your bad spending habits. And number one is overspending with credit. While it's not a bad thing to have credit cards that you can use when you have an emergency situation. But if you have too much credit card debt, remember that that reduction plan is you got to quit creating new debt. So you need to have a emergency fund to cover that. While having a credit card is handy, especially if you're traveling when something goes bad. But if you have the money in an emergency fund, you can pay that credit card off right away, you're doing good. But a bad habit is overspending with credit, you're using credit because maybe you don't have the cash or the money available to buy what you want to buy at the time you're buying it. Which comes to number two, neglecting a monthly budget, you probably don't have the money to buy what you thought you need it. Because you didn't have a monthly budget, you have no idea where your money is going. You just buying everything on a whim, you're not planning anything, you're not planning for that next, fairly large purchase anything, say over $500 you're not planning ahead, you don't have a monthly budget, you don't know where your money is going. And then the third bad habit is impulse buying. Maybe you're buying it because you see it and you think you need it. Maybe you just want to the shopping mall with some friends and you're just walking around with no plans to buy anything. You see something and then you buy it, maybe you don't really need it. I only go to the shopping mall when I need to buy something, I genuinely goes directly to the store where I genuinely buy it. I find the item I need such as shorts for the summer, and I buy a pair of shorts. I don't buy two pairs because I might gain weight or hopefully lose weight and they won't fit right. So I buy one pair and I wear those shorts. And they are overspending on monthly expenses while you're probably overspending on monthly expenses, because you don't have a budget. For these are all bad habits. Are you someone who starts off on the way to work and spend $6 sound like coffee in the morning. Seems harmless enough. But actually, it's a very bad spending habit. The $6 Coffee reverse represents $30 per week in additional expenses, which you're not tracking. If you're not tracking, you don't know that maybe you cannot afford that $6 Coffee five days a week. Damn, I'm just trying to make a point here. It's easy to allow your expenses to get out of control. But it's just as easy to curb your spending. And make sure you're only buying the essentials. Helping curving expenses. You should track all your spending for one month to determine what you buy, what you spend, and then decide what you really need when you got to need the four basics, housing, transportation, food, clothing, you don't need to buy clothing every month, but maybe seasonal, you buy clothes, everything else you're going to pay for on a monthly basis. And don't do it in your head. Because you may be spending things you forget about subscriptions to two different gyms because you forgot to cancel from the gym, you didn't like going to for whatever reason, just a case in point, you write it down. You track it. Keep track of where your money's gone. Know where your money's gone. And you will curb your spending a lot easier than not doing anything and neglecting long term plans and long term plans could be everything. Someday you're going to retire you need to save for retirement because you may not have enough income from any government account or your savings or pensions to pay your monthly bills. And I'm not talking about living beyond a better lifestyle retire because a lot of times you're going to have to live a lesser lifestyle because you have less income on a regular basis and no contingency planning. During the course of a month, just about anything can happen, that could certainly put you in a financial bind. Many people get into credit trouble because they're unprepared for financial challenges and rely on their credit cards to get them out of trouble. These are sort of bad financial habits that put people deep into debt and caused years of financial headaches. The simple solution here is to start a savings account, ie a an emergency fund that is specifically set aside for emergencies. This is different than the savings account we discussed earlier, that is used to set aside money for larger purchases. That account is used in conjunction with careful planning and consideration for future needs. The contingency saves count as account that is there to take up problems without using your credit cards. Hence, quit creating new debt. Have a plan and put it into place and make sure you do it. So while that is a list of what you should do, but basically it's a list of the major bad habits, overspending with credit, not doing a monthly budget, impulse buy in and overspending on monthly expenses, and missing credit card payments, not making a credit card payment, that's terrible, and neglecting long term plan and with no can turret contingency planning, so you don't know what's going on. If you're doing all those things, you're probably in trouble. If you're not planning for the future, he don't have a contingency plan of how you're going to replace something if it would break, like your car or refrigerator, something that you need on an everyday basis. And not having a savings account and set aside and thinking about your purchases, you're going to spend way more money than what you make. And it's easy to do nowadays, because everybody's giving you credit, you can go out and get a loan for three years to buy a refrigerator. But then you're going to be paying that $50 a month for three years. How many $50 a month loans can you afford to pay? If you have a house payment, a car payment? Maybe two car payments? How many refrigerator payments can you make how many, whatever else goes wrong, you borrow money for Can you make sooner or later, all your payments are gonna be more than your income. Because you don't have a plan. He didn't set aside money. You don't plan for the future. You overspend you impulse buy, these are all bad habits, that if you are doing them, you need to break them. And if you have an excuse why you impulse buy while I'm depressed and it helps me, well, how long does that help you for 30 seconds, I'm just saying, I don't know, what you need to do is the good things, you need to get these bad habits. identify them first, and then work them out of your life forever. Don't go anywhere. Whether it's the grocery store to buy your weekly groceries, or the hardware store to buy something for a repair of the house. Don't go anywhere without a list. Don't buy anything that you really don't need within the next few days. Any large purchase you should be thinking about before you need them. If you're driving a car that's eight years old and has 400,000 miles on it. Maybe you should be planning on replacing that car, and then next 12 months because who knows what's gonna go wrong with it. Maybe you'll need a set of tires and you put tires on it, then you have a major breakdown in the motor or transmission. Now you have brand new tires on the car that don't run that you get$150 for that you paid 300 for tires, and you're still paying on those tires and you don't have the car. That's the point. So habits, good or bad can help you and your finances. So I'll be back was my final thoughts and one moment If you listen to this podcast reduce that increased wealth on an Apple device, scroll through all the episodes towards the bottom. And you can select write a review, and leave your comments. And you can rate this podcast. I appreciate all feedback. And I thank you for your time and doing so. Changing your bad spending habits into good spending habit will pay you in rewards the rest of your life. If you quit overspending using credit, you do a monthly budget, you keep track of what's coming in and what's going out, you plan for your future, you plan for future purchases. So you don't have to keep using all that credit. You have an emergency fund in case something goes bad, and the immediate future, and you can take care of it. without creating new debt or lease without creating a lot of new debt. You keep your debt under control, you keep your spending under control, the only way you can do it, the best way is knowing what you have, what you need to pay for your bills. And the money that you have that you can set aside to say for future goals, future purchases, future emergencies. If you have children, that your pain and allowance, you need to set them down and have them write down what they're going to do with their allowance. You should then review what they wrote down and then direct them the way it should be. 20% should go into savings. If they're wanting to buy an item that costs a lot of money, then they need to say maybe 70%. So they can save up for that item. And then they'll feel like they accomplish something when they save their money for six months or a year. And they're able to buy that item. If they still want it. They'll appreciate it much more and take much better care of it. And you put it in writing, you make them do a budget. And you'll set them up for financial success in their private life for the rest of their life. Because you'll teach them good habits. One, make a plan to have a budget. Three, have an emergency fund, know what's coming in and what's going out and know where your money is going is the most important thing. You can teach your children and start them young and it'll become a habit and they will succeed in life and they will not get into credit card debt. They will hopefully avoid overspending with their credit cards, and they'll be much happier in life and they will thank you for that lesson.