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# Breaking Habits Can Yield Dollars to Invest

### by Joyce H. Christenbury, M.Ed., CFCS, Clemson University Cooperative Extension

Some of the items we buy are needs, items that are necessary for survival. Other purchases are wants, all the things we think we need, but could do without. Buying items to satisfy our wants can become a habit; before we know it, we are spending lots of money on these items. Find money to improve your financial situation by identifying some of your money habits. Then break those habits or at least reduce the number of times you enjoy the habit each day, week, or month.

Looking For Money

Cable TV \$40/month = \$480/year
Video rentals 3@ \$9/weekend = \$36/month = \$432/year
Movie tickets 2@ \$7/visit = \$14/month = \$168/year
Treats at movie 2@ \$5/visit = \$10/month = \$120/year
Dry cleaning 3 garments @\$4.50ea /mo = \$15.50/month = \$162/year
Car wash \$5/week = \$20/month = \$240/year

Going further, if your family drinks iced tea instead of a 2-liter soda for the evening meal, you can probably save at least \$5 a week or \$260 (\$5x52=\$260) a year. By drinking tap water instead of other beverages, you can save \$7 a week or \$364 (\$7x52=\$364) a year.

Let's look at those who feed the soda machines at work. By bringing soda from home (\$.30 each) instead of feeding the machine (\$.75 each), a person who drinks two sodas per day could save \$234 over the course of a year (\$.75-\$.30 = \$.45x2/day = \$.90x5 days/week = \$4.50x52 weeks = \$234). Changing or adjusting a few habits can result in big savings for you and your family. To see how easy this can be, use the following steps to help you identify and change habits.

Steps to Breaking Money Habits

Step 1: Identify the habit, determine frequency, and calculate total cost

Think of some habits you might be able to adjust. Select from the products or services listed or add your own choices to the list. Then determine how often you purchase the product or service. Next, calculate the total cost of enjoying the product or service for one year. Armed with this information, you are ready to advance to Step 2 in your quest to break habits and collect funds for investing.

• Hair Care

• Nail Care

• Dry Cleaning

• Eating Out

• Cell Phones/Pagers

• Vending Machines/Snacks

• Machines/Snacks

• Music CDs/Tapes

• Cigarettes/Alcohol

• Brand Name Clothes/Shoes

• Video Rentals

• Cable Television

• Movie Tickets/Snacks

• Pay-Per-View Television

• Bingo/Video Poker/Lottery

• Video Purchases

Step 2: Make a decision to change

The second step to breaking habits involves looking for alternatives and choosing a different way of spending your money. This action step demands that you take control of the situation. One way to do this is to review your money habits and where you spend money, then identify how you can make changes. For example, have you ever stopped to consider how much you and other family members are spending for hair and nail care? If you spend \$15.00 per week each month for hair care, that's \$60.00 per month or \$720.00 per year. Add a nail care bill of \$15.00 per month or \$180.00 per year. That is a lot of money.

What can you do? It is important for you and other family members to look good and feel good about yourselves. You can take control and make changes that will help you capture some of the money going to these expenditures and redirect its use toward other family goals and still be well-groomed. "How can I do that?" you ask. Learn how to do these tasks yourself, or barter with a friend or neighbor who has these skills. You do something for them that they can't do, and they do your hair and nails. Every once in awhile, you might treat yourself or other family members to a special makeover. Otherwise, save the money you would be spending on hair and nail care, and put this money toward your family goals.

Once you get into the swing of breaking habits, you and your family can come up with ideas on how to change and adjust spending.

Step 3: Act immediately

Now that you have all these great ideas to keep more of your money, how will you keep yourself motivated? Writing down your new desired behavior is one strategy. By recording the change, you are committing yourself to a new behavior. It is necessary to start your new behavior immediately. For best results, begin within 24 hours after making the decision to change or adjust spending. The sooner you begin a new behavior, the sooner the new behavior will become a habit. Step 4 will further assist you in adopting new behaviors.

To further establish a new behavior, share your plan with others. Tell family, friends, and co-workers about your plan. By giving others the opportunity to support you, you boost your determination to succeed. If your behavior change involves the entire family, all family members must work together for the family to succeed. Refer back to the worksheet, "So Where's The Money?" Go over the chart with the entire family. Together, decide ways the family can break habits and develop a savings plan. Now is also a good time to make a family "piggy bank." The "bank" can be an empty jar or a small box. Once the family decides on their family financial goal, they can put a picture identifying the goal on the "bank."

Examples of goals include paying off a bill, buying something for the house, visiting family in another state, or accumulating money for school shoes. The "bank" needs to be kept where all can see it and all can help by adding money. After accumulating a sum of money, the family might want to open a savings account at a local bank or credit union. Once this account has grown to cover emergencies, additional savings may then be invested so the family will realize a larger return on their money. Even with the best of intentions, sometimes staying focused on your savings plan is hard. The next step of the action plan will help you move forward.

Step 5: Stick with your plan to change

Step 5 is a critical step toward breaking habits and increasing family savings. You and family members must always look for new ways to reduce spending and increase savings. It is important to reinforce the fact that you can change your attitudes and break habits. Stay focused on your goal. It takes about 30 days for a new behavior to become a habit. Here are some specific activities for you and your family that will help you gain control of your finances, but still have fun as a family. By engaging in activities such as these, we are changing our attitudes and choosing activities that are more "money friendly." Changing attitudes and lifelong habits will serve you well immediately and over a lifetime and set an example for your children by instilling the value of saving.

Yes, you can do it. You can change your attitude. You can break habits and save for things that are really important to you and your family. You just have to stick with your plan. If you are successful, you will reach Step 6 of our action plan.

The last step to breaking habits is to celebrate your success. Once you have reached your initial goals, let others know of your success. Enjoy the fruits of your savings. Then continue with your new behaviors that are now habits. You have the tools necessary to be successful. Remember to trim all unnecessary expenses and keep your needs and wants in perspective. Watch the pennies you save grow into dollars which can be used to fund your saving and investment programs.

Joyce H. Christenbury, M.Ed., CFCS, is a professor and extension family resource management specialist in the Family and Youth Development Department with the Clemson University Cooperative Extension Service. She provides leadership in the area of family resource management with an emphasis on helping individuals and families develop skills needed to cope with today's complex marketplace.

Exerpted from "Basic Investing Home Study Course" sponsored by Rutgers Cooperative Extension in cooperation with the Cooperative State Research, Education, and Extension Service of the U.S. Department of Agriculture, and the U.S. Securities and Exchange Commission .

For the entire course visit investing.rutgers.edu

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