For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure . TheCollegeInvestor.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. TheCollegeInvestor.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The College Investor does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

At The College Investor, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners. This doesn’t influence our evaluations or reviews. Our opinions are our own.

Good intentions can only go so far in changing bad habits. It takes time and commitment to change bad financial habits.

Scientists studying addiction have found that a brain chemical, dopamine, is released when humans experience pleasure. Dopamine is a neurotransmitter that sends messages throughout the brain and creates pathways that lead to addictive behavior. If the brain associates spending money with pleasure, the positive association can lead to addictive spending behavior.

For instance, you walk to work each morning and stop at a donut shop for a flavored coffee drink and a muffin. The first time you stopped, you found the experience pleasurable and after several stops at the shop, your behavior became a habit or even an addiction.

While you could easily eat breakfast at home for a fraction of what you spend at the donut shop, it is difficult to forego both the dopamine fix and the coffee once the pattern has become established.

How To Start Changing Bad Financial Habits

One simple solution to the donut shop dilemma is to simply change your route to work. If you do not pass the shop, you will not be tempted to stop and buy your coffee and muffin. Get up a few minutes earlier and eat breakfast at home so you are not hungry and will not stop at another spot.

If you spend $5.00 every day at the donut shop and eating at home costs $2.00 per day, you will save $15.00 per week, $60.00 per month, or $720 per year just from avoiding the donut shop. As an added bonus, you may lose a few pounds since the food you eat at home probably has fewer calories than the muffin and a slightly longer walk means extra exercise. Now imagine other aspects of your life that are draining your bank account.

To start changing your spending habits, you have to learn to forego instant gratification for the reward of future financial achievements. Each time you want to spend money impulsively, stop and think about how good it will feel when you put a down payment on a new house, send your child to college, or no longer have to worry about the rent being paid on time each month. By considering these future pleasures, you can train your brain to save instead of spend.

How Do You Spend Your Money?

The first thing to consider is how you spend your money and the best ways to eliminate unnecessary spending. If you have a closet full of things you’ve worn once in your life, you should start shopping at discount stores. Keep track of every dollar you spend for one month and decide which items are non-essential and can be cut from the budget.

Sometimes, it’s not necessarily the product or service you are purchasing, but how often you purchase it. For instance, coffee – most people can afford to spend a $2 or $3 dollars twice a week, but if you are spending $50 a week buying lattes and Frappuccinos twice a day, you may want to stop overspending and consider the Latte Factor.

One of our favorite tools to keep track of our budget is Personal Capital. It’s a free tool that syncs all your accounts and helps you keep track so you can eliminate unnecessary spending.

Identify Times When You Overspend

Do you have a standing date with the girls to cruise the mall on Saturday afternoons? Or do you meet the guys at the sports bar on Sundays? Do you regularly spend over your limit when you engage in these activities?

If the answer to these questions is yes, maybe you should suggest different activities or find companions who are supportive of your desire to save money for financial goals. If you can identify and avoid the activities that lead you to overspend, you can break bad habits and create good ones.

Get Support

While there are lots of support groups for over-eaters, alcoholics and people suffering from other addictions, you’ll have quite a bit of trouble trying to find support when changing their spending habits.

The best way to get support may be to approach family members or friends and tell them how you are planning to change your bad spending habits. You have to be completely honest when you ask for their help and support, and be willing to listen to their criticism if you fall off the wagon. Knowing others are watching you may just help motivate you to stick to your plans.

You Deserve To Be Rewarded

Rewards or bonuses encourage good behavior in children and productivity in employees and anyone who reaches a goal deserves to be rewarded. When you change your bad financial habits and reach a savings milestone, such as $5,000 in your savings account or 3-months’ worth of expenses in your emergency fund, you should plan on giving yourself a bonus for your hard work. Whether you choose to buy something special, have dinner at your favorite restaurant or treat yourself to a spa or salon, plan and budget for the reward so you have extra incentive to meet each milestone in your financial plan.

Visual aids can serve as a reminder to save when you are tempted to spend money frivolously. If you are saving money for a down payment on a house, put a picture of your dream home in your wallet, the place you have to look before you can access your cash or credit cards. If retirement is your goal, a photo of a sandy beach at sunset may work as an incentive to avoid unnecessary purchases. The real reward will be reaching the goals you have set for yourself and pictures can constantly remind you to stay disciplined.

Risks of Credit Cards

While credit cards can be a useful financial tool because they can help build your credit, they can also encourage you to overspend. When you cannot pay off the full balance on a credit card every month, you not only pay for an unnecessary purchase, you pay interest rates of between 12% and 24% on the money that was borrowed. Even if you get a great price on an item, the interest charges can cost more than the purchase if you cannot pay for it when you buy it.

Most people can change their spending habits with a little thought and effort, but there are some who might need to seek professional counseling. Compulsive shoppers may have underlying emotional or psychological issues which must be addressed before they can understand and change their bad financial habits. In the end, not every system or reason for saving money is the same. Explore what goals are truly important to you and use them as motivation to stop wasteful spending and start building wealth.

Gary Dek is a former investment banking and private equity analyst. He writes at Gajizmo.com.

What other tips and tricks do you have for changing bad financial habits?