6 steps to financial detox

Detoxing can be applied to many areas of our lives. Juice cleanses after New Years, spring-cleaning with Marie Kondo and escaping toxic relationships. But what about detoxing in the one area that affects all aspects of your life – your finances? Detoxing your finances, or learning how to spend money wisely, can create greater success, balance and joy in your life.

So how do you step away from negative financial habits and learn to spend wisely? Use this list as your action guide or playbook. We have gone in depth regarding these topics in other articles, but have you executed your plan yet? Now is the time. Not another day, not another hour; now is the time to align your finances with your values and your goals. Don’t put it off or feel overwhelmed by the prospect of overhauling your finances – just take it step by step.

1. Create a spending plan

If you caught our post directed towards new graduates, this action item may look familiar to you. Unfortunately, creating a spending plan is something that many adults were either never taught or have failed to implement, and yet it is essential to your financial freedom – and peace of mind.

Although spending plans are most commonly referred to as a budget, this term can make some people feel restricted. A spending plan is something that you devise (with your spouse if you’re married, or with a financial advisor if you feel so inclined) that allocates where your income is going to go before the bills arrive in order to cover basic needs and get you to your goals faster. When you implement a new spending plan, it may take a few months before you get into the groove and anticipate all your expenditures, but stick with it until you see incremental changes.