Money habits to let go of in 2025
If you want to manage your money better, you need to assess how you currently spend your money.
If you're stepping into the New Year with a promise to manage your money better, we're here to remind you it will take some work.
You know that saying about doing the same thing continuously and expecting a different result, right? Albert Einstein called it "Insanity", and we couldn't agree more.
Learning to manage your money more responsibly will bring long-term positive changes to your life. So, by the time the next New Year rolls around, you won't be dreading Januworry or stressing about how to get by. Instead, you'll be celebrating your newfound good habits.
Here are some habits to let go of as you start your journey to a more financially savvy lifestyle.
1. Say goodbye to impulsive shopping
Impulsive shopping primarily benefits marketers who tap into your psychological buying triggers. Rather than splurging on items you don’t need, focus on saving that money for what truly matters and reward yourself by building your savings.
This is the first step to practising financial discipline, though it might take some time to master. If you find it difficult to resist the temptation, consider keeping your savings in a 32-day account, where it’s not easily accessible when the urge for retail therapy strikes.
READ MORE: Smart tips to help you save money
2. Living it up like the Joneses
Chasing a lifestyle you can't afford is not only unsustainable but also unnecessary. Many people go into debt trying to keep up with the 'it' crowd, all for appearances. But the truth is, overspending doesn’t solve real problems like financial stress or hunger.
The key is staying true to your own financial reality. Be smart about your spending, and remember that there’s always a more affordable way to enjoy life’s pleasures.
3. Budgeting is your friend
If you haven't started budgeting yet, consider this your sign to start.
"This habit is often overlooked because it seems tedious or restrictive. But in reality, a budget is your financial roadmap. It helps you see where your money is going, allowing you to make adjustments and prioritise your spending.
"Without a budget, losing track of your expenses and spending more than you earn is easy. It can also lead to savings being neglected or debt accumulating." (Geediting)
4. Small expenses add up
Don't write off all the small expenses, which tend to add up – quickly. Takeout meals, daily coffee runs, and quick treats may seem insignificant, but over time, they can have a serious impact on your budget.
"These are often called ‘leaky bucket’ expenses. Just as a bucket with a small hole can eventually empty all its water, these seemingly minor expenditures can slowly but surely drain your finances." (Geediting)
That doesn’t mean you can’t treat yourself now and then. A well-planned budget allows you to allocate a set amount for these indulgences, ensuring you can enjoy them without compromising your savings goals.
5. Start saving
It’s never too early to start saving. The longer you wait, the harder it becomes to build your savings. Don't leave it for tomorrow or when you are earning more – start small and enjoy the satisfaction of watching your savings grow.
Take the time to learn about compound interest: "The process by which interest is earned on both the initial amount saved and the already accrued – works best over long periods. The earlier you start, the more money you can accumulate." (Geediting)
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