Below we’ll examine 24 good financial habits that can make the best of your financial situation.
Make a thorough list of your needs and goals. Determine how much you are spending and how much you need to spend. After developing your budget, begin decreasing your non-essential spending.
2. Create Emergency Funds
A good rule of thumb is to have at least three months’ worth of funds available in case of an emergency. If this seems impossible, start small. Even saving $10 from each paycheck is better than not saving anything!
3. Spend Less Than You Make
This is simple math. Find a way to make more than you spend. There are two ways to do this: You can try to achieve it through cutting down on your spending or by finding additional work.
4. Pay Ahead
Paying your bills ahead of time will save you money on late fees.
5. Pay Cash
Spending cash is a great way to ensure that you can pay for the things that you buy. When you spend physical dollars, your brain processes it differently than it would if you used a card. Use this to your advantage to really notice what you spend on any given purchase.
HELPFUL TIP: Try using the “Envelope System” whereby envelopes are labeled for specific items (i.e., Food, Gas, Entertainment, etc.). Then, place the allotted cash in each envelope. Once the cash is gone, that’s it, no more spending in that area.
6. Make More Than the Minimum Payments
Pay more than the minimum requirement on any of your credit card debts. This will help you with the next financial habit that we’ll discuss!
HELPFUL TIP: If possible, always have enough in your bank account “before” using your credit card—that way, you can pay the whole bill with no extra fees.
7. Pay Down Debt
Paying down your debt is one of the best things you can do for your financial security. Use credit cards only in cases of emergency. Best of all, if you have an emergency fund in place, you may not need to use a credit card at all!
8. Pay Yourself
Automatically transfer a certain amount to your savings account every time you get paid. It can be as little as $10.
9. Know Your Credit Score
Tracking your credit score can help you to know your situation and see your progress over time.
10. Improve Your Credit Score
Paying bills on time and decreasing your debt will help to increase your credit rating.
11. Essentials First
Pay for the most important things first. Food, water, and shelter are essential. Only pay toward debts after you have taken care of these necessities.
12. Turn Off the TV
Advertisements can lure us into spending more money than we should. Avoid or ignore any advertisements that you can. You already know the things you need.
Avoid get-rich-quick advice. But do spend some time learning about financial maintenance strategies.
14. Talk with Your Kids about Finances
If you have children, be sure that they understand the effort it takes to gain money and help them to develop good habits for managing it from a young age!
15. Weekly Budget Review
Each week spend at least 30 minutes reviewing your budget, and make adjustments as necessary. This is a great way to keep everyone in your household on the same page!
16. Follow a Useful Blog
There are plenty of blogs that offer valuable financial advice and tips. Subscribe to one and use the knowledge that you gain.
17. Savings Goals
Set specific savings goals for one year, five years, or ten years into the future.
18. Track Every Dollar
You should know where every single dollar that you make goes. Many people lose large sums by spending small amounts thoughtlessly over time.
19. Manage Subscriptions
Review any recurring payments and cut costs where you can.
20. Negotiate Bill Payments
Phone providers, ISPs, and cable companies will often negotiate prices to ensure that customers return. Use this to your advantage.
21. Meal Planning
Buying quality meal ingredients is always a better idea than purchasing pre-packaged individual meals or snacks.
22. Keep Housing Costs Stable
If your income increases, fight the urge to upgrade your home. Keep costs stable, even if you begin to make more money.
23. Avoid New Cars
Do not be lured in by tempting credit-based or unnecessary vehicle purchases.
Building habits will take time. Ask a parent, friend, or mentor to help you stay on track.
No one can single-handedly shape their financial destiny, but these good habits will help you to make your financial future as secure as possible. This article is for information, illustrative, and entertainment purposes only and does not purport to show actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular investment action.