We all have bad financial habits we’d like to change. 

Maybe you’re stressed about the amount of money you’re spending without thinking. 

Or maybe you’ve stopped looking at any of the bills coming in. 

Or maybe you’re dreading having to ask your sister-in-law for another loan.

No matter the financial habit that is causing you stress, change is possible. Here’s how:

Your Habits Aren’t Bad!

The first step to changing your habits is to stop thinking of them as “bad.”

Let’s say you gave your credit card more of a workout than you intended on your vacation. You might get home and think that you were “bad” while under the influence of sunshine and Mai Tais. But describing your spending on vacation as “bad” causes you to feel ashamed and conflicted as your “good” and “bad” impulses duke it out for dominance. 

Clinical psychologist Lara Fielding, Psy.D. writes in A Clinicians’ Guide To Integrating Mindfulness Into Evidence Based Practice, “as long as [you] engage in this battle [between habits labeled good or bad], large portions of [your] self are [your] own enemy, and [you feel] there is something inherently wrong with [you].”

For instance, your long-term love affair with online shopping and next-day shipping isn’t bad — it’s a behavior getting in the way of your larger goals. There’s no need to make a moral judgment about it or yourself.

That’s why “disordered” is a better label for the habits you would like to change — but how do you know if your habits are disordered? 

According to Sarah Brady, personal finance educator and former NFCC Certified Credit Counselor, “a major sign is if you are in perpetual financial distress, if your financial situation never changes, or if you fail to set or make any progress toward financial goals.”

How to change your financial habits

Illustration by: Emily Guy Birken

Common Disordered Habits

Lauren Greutman, addictions counselor turned personal finance expert, explains that there are five common types of disordered financial habits:

Overspending and Compulsive Buying

We have all experienced the “Wait, I spent HOW MUCH?” moment after an impulsive purchase. While the occasional shopping spree may not be ideal, it’s not necessarily a disordered habit.

But your overspending habit is disordered if you “feel the need to buy things or feel ‘lost’ when you can’t go shopping,” Greutman says.

Brady adds that the “need to buy” sensation often has a strong connection to unresolved trauma. “When we’re hurting, we may use the thrill of a purchase to give us comfort or release,” Brady explains. This is not a moral failing or a reason to beat yourself up. 

“Tons of marketing dollars have convinced us that shopping feels good,” Brady says. “The important thing is to identify other meaningful forms of comfort.”

Underspending and Compulsive Hoarding

People who are extremely careful with their money often congratulate themselves for their “good” financial habits. But underspending can be just as disordered a habit as overspending.

An underspender may have a “problem getting rid of things or a [compulsion] to hold onto everything because they ‘may need it someday,’” Greutman says. For instance, children of the Great Depression struggled with hoarding because they knew exactly how it felt to go without.

But underspending may also manifest in other ways, such as denying yourself. Let’s say you consistently wait to replace your running shoes until your old pair has completely fallen apart. Instead of saving you money, this leaves you vulnerable to injury.

To determine if your frugality veers into disordered habit territory, Greutman suggests you ask yourself if you have excessive thoughts and anxiety about money or if your habits are getting in the way of your everyday life.


America’s relationship with work can make workaholism look like a virtue. When your boss, family, barber, and Congressional Representative all view a strong work ethic as a positive trait, you may not realize that your commitment to the job is a disordered habit.

A strong work ethic may be a disordered habit when “you feel stressed when not working and [feel the] need to work to ease the anxiety within,” according to Greutman. 

Financial Dependence

A loan from a parent, sibling, romantic partner, or friend can help you through a tough time. But when you become completely dependent on another person for money, that can not only get in the way of your goals, but it can also harm you or your loved ones. That’s because financial dependence can be a sign of an abusive relationship, since abusers want to keep their victims from leaving. 

Greutman and Brady recommend therapy as a helpful tool in overcoming habits of financial dependence. Not only can partnering with a therapist help you get to the root of your own money behaviors, but a therapist can also help you see signs of a dangerous situation like an abusive relationship.

Money Avoidance

“The most common coping mechanism I see, by far, is avoidance,” Brady says. “I’ve spoken with countless people who think they’re better off ignoring their financial situation than sitting down and looking at the numbers.”

But our problems don’t go away when we pretend they aren’t there. (That letter from the IRS will not disappear, not even if you hide it behind the ficus. They’ll just send another, and another …) 

It’s okay to set something aside until you have the time to deal with it. But if that time never comes, then this habit will get in your way.

Getting Your Financial Habits in Order

So how do you get rid of your disordered habits? Instead of trying to simply stop cold turkey, Brady recommends making a tiny change to your routine. 

If you’re terrified by the idea of looking at your budget, “start by picking one night of the week that you’ll look at your financial accounts,” she suggests. “Read through your statements on that night, and take a few minutes to acknowledge what you’ve spent.”

By adding this small, new habit, you’ll naturally start making different financial decisions. The amount you spent last week will be on your mind this week, and will help you say no to spending that you don’t really want. 

Once your weekly check-in is well established, add a new habit, like setting a weekly spending cap or giving yourself a short-term savings goal. Each small change you add after making the last one routine helps to eventually bring your habits in line with your goals.

“It can take some maintenance to clean up your habits,” Brady says. “Expect it to be challenging. But it will get much easier with practice.”

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