Money habits are developed from a young age? How do you go about changing any bad habits?

I call it “rewiring my brain”. And I’ve had to do it a bunch of times since 1999 – when I first decided an aspect of my life needed an exorcism.

While none were bad money habits per se, all were destructive behaviour patterns with financial consequences. I tended to focus on the financial outcomes as the motivator to achieve the outcomes. So the process should be fairly similar.

First, you’ve got to understand the habit or behaviour is affecting your life. Second, you’ve got to want to change it, bad. Michael Jackson Bad.

If you can’t muster those, forget it.

It’s so much easier if you’ve got the right motivation. And there are no better motivators than fear and greed. Harness them. Control them. Channel Jedis using “The Force”.

It could be a fear that you’re going to end up poor, or greed that makes you want a better life.

Third is the hard bit. You’ve got to coach yourself to do the opposite of what you’ve always done. That’s how habits are broken.

Changing money habits inevitably involves sacrifice. You’ll either have to fight the urge to spend on something that you unthinkingly spend money on, or you’ll have to actively take an action that previously you couldn’t be bothered doing.

Rather than doing budgets – which will work for many – I set targets. Targets that I want to have saved/earned/purchased something by a particular time. Write them down. Put them somewhere where you will see them regularly.

And work towards it. Good luck. It’s not easy. But it’s rewarding.

Bruce Brammall is the principal adviser with Castellan Financial Consulting (www.castellanfinancial.com.au) and author of Debt Man Walking.