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Our spending habits and money habits are formed from a very early age. And due to the importance of money in our lives, it can be more challenging to change or reestablish good spending and money habits. To change your spending habits and increase your income to debt ratio, start by eliminating these negative spending habits.

Spending more money than you make. This has to be the top detrimental spending habit. There is absolutely no way that spending more than you make won’t land you in extreme debt if allowed for too long. While it may seem obvious to spend less than you make, it is relatively easy to do so, especially with the invention of credit cards and cash advances, or simply by borrowing money from family and friends.

While these options may be something to remember as a backup plan, overspending each month digs a hole in your finances for the following month. When you make $900, but spend $1000, you have to take an extra $100 from your new paycheck to pay off debt from last month, possibly with designated for bill money. Thus a cycle begins.

Spending without a plan. It’s as simple as going grocery shopping. When you make a list of what you need and stick to it, you are 9 out of 10 times more likely only to spend what you planned for. Without a list, shoppers guess as to what they need and are tempted to take anything that looks good. (Additional tip- when grocery shopping, eat before. You will be amazed at the difference in your reasoning.)  

Paying for convenience. Things, like delivery food, makes life easier when it comes to sitting at home watching television. However, it doesn’t make things like balancing your checkbook or creating better spending habits easier. Avoid the delivery fee and pick it up. Better yet, plan out your meals for the week to help you budget food and money.

Not tracking spending. You NEED to balance your checkbook. You NEED to recognize how and where you spend your money. This is an essential step in managing your finances.

Using Debt to pay off debt. A prime example of this is using a credit card to pay bills. While it feels nice to get that bill out of the way and taken care of, you have not managed any debt. Instead, you have shifted your debt. While this could pay off if high-interest rates are involved, most times when debt is shifted, you can end up worse than when you started.