How To Identify Your Financial Baggage And Drop It ASAP

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When was the last time you took a look at not only how you’re handling your money, but also what motivates you to handle your funds the way you do? You may already check your chosen budgeting and financial planning apps frequently, and maybe you’ve even done a financial cleanse. But if you feel like you still can’t catch up, you may have financial baggage.

But don’t worry — we’re gonna help you figure out what’s going on and how to eventually put a stop to your vicious financial cycle. When you hear the words “financial baggage,” you probably think about a slew of impulsive Seamless orders or your insatiable love of new shoes. That’s almost what it means, but you’re missing one detail: the reason why you keep spending the way you are. If you’ve indicated spending patterns that are hurting your financial situation, you likely have financial baggage or an issue not necessarily with the act of spending but the mental reasoning behind it.

A report by The Money and Mental Health Policy Institute found that the state of your mental health could affect the way you spend your money. In an analysis of 5,500 people who have experienced mental health issues at some point in their lives, 72 percent of participants said that their poor mental health made their financial situation worse and 93 percent reported demonstrating poor spending habits during this time in their lives. Of those who fell behind on bills in the previous year, 67 percent of participants blamed their declining mental health.

Essentially, the report found that the connection between mental health and financial responsibility was paramount, and that one’s current mental state could dictate his or her own financial situation.

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So, what do you do once you’ve realized that you do have financial baggage? Confront the issue head-on.

1. Map out your spending patterns and identify your bad habit.

Sometimes, the first step is literally just admitting that the patterns are real and that your habit exists. Habits often form easily and die hard, so you should also know that your task to break it won’t be easy. But ultimately, know that it’s doable.

2. Remind yourself why you’re breaking this habit.

Coming back to the “why?” will help you in times of weakness — like when you had a horrible day and you really want to drop a few hundo on those new pumps you saw in your favorite store’s front window display. Remind yourself what you’re kicking your habit for, who it’s benefitting (you, duh) and how it’s benefitting you. Keep looking toward the future and your long-term goals in ditching the habit for good.

3. Replace your habit with something else.

Okay, so you talked yourself out of buying the pumps, but that feeling of need is still there. Instead of trying to quit the habit cold turkey without filling that mental void it leaves, find a healthy outlet to replace your spending. Working out or joining a book club are just a few examples of good, active things you can do to keep your mind off spending money.

We’re not saying it’s easy, but kicking your bad spending habits will not only help your financial situation, but also help you learn how to control the parts of your life you felt you couldn’t before. Once you successfully stop a habit in its tracks, you’ll feel like you can handle anything.