The 12 worst money habits and how to break them

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Everyone is guilty of a bad habit or two.

But it's not your addiction to Candy Crush or your refusal to recycle grocery bags that worries us. It's the habits that damage your finances — from overspending to procrastinating about paying bills — that set off our alarms.

In fact, we're so committed to helping you change your less-than-stellar money habits for the better that we're featuring a series of articles this month that specifically examine the science, psychology and strategies behind behavior change.

And what better way to kick off the series than with a month-by-month guide to financial self-improvement for the whole year? That's why we asked six LearnVest Planning Services Certified Financial Planners to pick 12 of the most common bad money habits that they see (one for each month of the year) — and then offer their expert advice for breaking them in 2014.

1. Buying lunch ... and coffee and snacks every day

If you live or work in a city (or your commute brings you past five different drive-thrus), buying lunch out can be irresistibly easy — and problematic if your habit starts absorbing the money you'd prefer to save for something else ... like a Caribbean vacation to escape the frigid cold this month.

"There's nothing wrong with buying the occasional lunch or snack on the go," says Stephany Kirkpatrick, CFP, Director of Financial Planning at LearnVest Planning Services. "But when you're aiming to conquer major financial goals, this is one of the easiest areas to cut back without seriously sacrificing your quality of life."

While an ideal habit would be to avoid last-minute food purchases altogether, that's not always realistic. "If it's too much of an adjustment to go cold turkey, create a budget in the LearnVest Money Center and decide beforehand how much you'll spend — and then challenge yourself to spend $10 less next month," recommends Kirkpatrick. "Be sure to allow yourself one day a week when you do grab lunch — and savor it, so bringing lunch the other days won't make you feel like you're missing out."

How Much You Can Save: If your lunch-buying habits are anything like that of the typical American, you probably buy a lunch that costs around $10 twice a week, spending about $1,000 a year in the process. If you cut your habit back to one lunch per week, you could save around $500.

2. Neglecting to get the best rate

Sure, paying your bills on time is a good habit — but paying more than you should is a bad one.

Case in point? Astronomical cable bills for the 300-plus channels that you never have time to watch. And you're not alone: The average monthly American cable bill, including phone and Internet services, was $128 in 2011 — that's triple the price from 10 years ago.

"Things fall into three buckets," explains Natalie Taylor, CFP with LearnVest Planning Services. "Things you can control, things you can influence, and things you can't control or influence. Monthly bills fall into the second bucket, so use your influence wisely."

You can start by poking around your provider's website to see what kind of introductory and special rates they currently offer or visit lowermybills.com, which looks at your region and current bill to automatically search for better phone and Internet offers. Once you have an idea of what you could pay instead, call your provider to see if there's any wiggle room on your rate.

How Much You Can Save: "Lowering your bills is a great way to find extra dollars for your goals without having to sacrifice your lifestyle," explains Taylor. If you can negotiate only $10 off your monthly bills, you'll save $120 a year. If you go a step further and cancel your cable to save $100 a month, that comes out to $1,200 a year. Put that cash into a retirement account and you could help grow your savings!

3. Not prioritizing high-interest debt

All debt isn't equal. So while you should always pay the minimum on your various debts — be it student loans, credit cards or a mortgage — a more productive strategy is "racking and stacking." Essentially, you rank your debt in order of highest to lowest interest rates, and prioritize paying off the debt with the highest interest rate first by devoting any extra cash toward that debt. Once it's paid off, you move down the list to pay down the next high-interest debt.

"Focusing on paying one debt off at a time (while making minimum payments on all other debts) can not only save you interest, but it can also give you additional cash-flow flexibility over time," explains Taylor. "As each debt is paid off, you have one less minimum payment to worry about every month. You may still decide to dedicate just as much each month toward debt reduction overall, but you've got more flexibility, which always feels good!"

How Much You Can Save: If you're sitting on a $10,000 credit card balance with 12% interest, you're paying $100 in interest a month (and that's a pretty low interest rate). Since most lenders require that you pay at least your interest every month, you'll need to pay more than $100 a month in order for your balance to start decreasing.

"With payments of $150 per month, it would take more than nine years to pay off the debt, costing about $6,500 in interest," says Taylor. "With payments of $400 per month, it would take only two and a half years to pay off the card, and cost $1,600 in interest."