Are you bogged down with too much debt? One way to revive your perspective and revamp your spending habits is to mix up your routine by changing your habits.

Mark Twain once wrote, "Nothing so needs reforming as other people's habits." Those little things we do without thinking aren't all bad. Habits help us automatically decide which hand holds the fork and the toothbrush, and which shoe goes on first. But other habits need to be reformed, particularly those that keep us from managing our money responsibly.

Identify your habits

When you have a debt problem, it can be difficult to know where to start making changes. You know you have to make a budget, cut down on spending money, stop using the credit cards-but incorporating those things into your daily life is far easier said than done. Most often, this is because habit takes you to Starbucks, or causes you to reach for the plastic, or has you buying a round of drinks for the gang.

Your best starting point is to identify the habits you have regarding spending. If you've recently experienced a lifestyle change, this could be a long list. Many recent college grads, for example, must transition from living in debt to living without it. Before graduation, they relied on a student loan or two and a credit card. After graduation, the paychecks start coming in; but so do bills for credit cards, utilities, and car payments. If those grads don't recognize their habit of pulling out the plastic for every purchase, they'll find themselves sinking under rising debt.

Changing habits

It isn't so easy to stop doing something that you're used to. An easier strategy is to replace your bad habit with a good one. Here are some examples:

Instead of shopping during lunch, go to the gym and work out.
Instead of charging gas purchases, calculate what you spend each week, and keep that amount with you in cash. You can do the same for your groceries.
Instead of buying a pricey coffee drink, make your coffee at home, whipped cream and all, and take it with you.
Instead of eating out daily, start a 'bring your lunch' club at work.

Consolidating debt

Sometimes, consolidating debt might be the first step towards revamping your money management habits. When you're feeling the weight of debt after years of overspending, consolidation puts you on the road to regular, monthly debt reduction. If you do consolidate, you owe it to yourself to destroy all of your credit cards. Doing so will force you out of the habit of charging and into the habit of paying cash.

Mark Twain also said, "Habit is habit, and not to be flung out of the window by any man, but coaxed downstairs one step at a time." So don't get discouraged! Changing those old destructive habits will be tough, but not impossible.

Published on May 12, 2007