Tag Archives: finance

The Consequences of Bad Money Habits

For years, years! I have had a bad habit. This habit is the opposite of money saving and financial planning. It hurts me to admit this, but every day, 7 days a week, my breakfast has been a medium iced coffee and 2 donuts from Dunkin Donuts.

For a minute, let’s disregard the health implication of this and let’s talk about the financial consequences. This habit costs me $4.81/day. That is $33.67 a week and $1750.84 a year. I feel nauseous coming clean about this in addition to thinking about all the other way more productive things I could have done with this money over the years. Almost $2000 a year spent on something that honestly stopped giving me pleasure a long time ago. So why did I keep going to Dunkin Donuts?

Running out the door, late to work and without eating breakfast I autopilot to the nearest Dunkin. The barista knows my order; I don’t have to say anything and my coffee is made, my credit card is handed over, and I’m back in my car heading to work. Sipping on my coffee I once again autopilot the drive to work. No thought has gone into this series of events and no matter how tired I am there is structure to my morning. I know exactly what I am going to do. This habit has become comfort food, and a calming ritual that is something I can control. However, I now realize I am not in control.

Some research on habits indicates that habits are the product of your subconscious mind. If something is pleasurable for a period of time in your life when things were hard, your subconscious mind will forever associate the action with pleasure. Our natural inclination to avoid pain and seek pleasure can cause a habit to form if we let it, as we (and me in particular) seek to stay in our comfort zones. Dunkin became a comfort zone for me, but I want to stress that for a while, I didn’t know why I was doing it.

As an avid reader of financial planning blogs, I knew in my logical mind that this $4.81 a day action had to stop, but every day I kept going and getting my coffee and two donuts. I consider myself a pretty logical person, but I felt out of control to stop.

I justified this action to myself and to others.

“This is the one thing I spend money on, it’s fine to do this one thing.”

“Coffee relaxes me.”

“I have the money to do this, I’m not going into debt.”

But this self justification is insidious to being productive in life and insidious to the financial planning process. I am an expert at justifying spending money to myself, in particular because I have been lucky enough never to go into credit card debt, never to not pay my balance in full at the end of the month, and to keep an emergency fund stocked at all times.

An excellent article on the insidious nature of self justification quotes a book called Mistakes Were Made (But Not by Me).

“The engine the drives self-justification, the energy that produces the need to justify our actions and decisions -especially wrong ones- is an unpleasant feeling that Festinger called ‘cognitive dissonance.’ Cognitive dissonance is a state of tension that occurs whenever a person holds two cognitions (ideas, attitudes, beliefs, opinions) that are psychologically inconsistent, such as ‘Smoking is a dumb thing to do because it could kill me’ and ‘I smoke two packs a day.’ Dissonance produces mental discomfort, ranging from minor pangs to deep anguish; people don’t rest easy until they find a way to reduce it.”

I can’t stress enough how much this relates to my habit of going to Dunkin. “I have the money to do this, it makes me happy” and “This makes no sense I should be saving this money.”

The action of spending $4.81/day at Dunkin began to cause me minor pangs of mental discomfort. As I read more and more financial planning blogs I then started to feel deeper anguish. My logical mind was fighting with my subconscious. But each time I tried to stop, I would last a few days and then fall back into my pattern. “Ahhh, relief”. I felt relief going back to my habit! The structure of my morning was back in place.

But in the back of my mind I was and am unhappy with myself.

They say that a habit takes 21 days to break, but a more recent study by the European Journal of Social Psychology  says this may not be true. Research shows that habits among individuals took a range of 18 to even 254 days to break, making the median time 66 days.

Today I will start and document my journey to STOP GOING TO DUNKIN. This needs to happen, both for my health and for my pockets.