One of the best ways to achieve financial success is to have good money habits.
Bad money habits like impulse buying and not having a budget will wreak havoc on your finances.
Building good habits is not easy. There are sacrifices, but it will be all worth it.
Here are 15 good money habits that your future self will thank you for.
15 Good Money Habits That Your Future Self Will Thank You For
1. Set money goals
What are your goals? Do you want to have your own business? Do you want to invest in the stock market? Goals will keep you on track and will motivate you to save money. It will help you to be focused.
2. Live below your means
It is not how much you earn but how much you save. According to Ramsay Solutions, lifestyle inflation happens when you increase your household spending as your income grows. To live below your means is to live a simple life. To spend less than what you earn.
3. Budgeting your money
Budgeting is creating a plan on how to spend your money. Budgeting is simple but challenging to do. It is to list down your revenue and deduct your expenses. Priority must go to the essentials such as food, shelter, utilities, and transportation. You can track your expenses by using budgeting apps so that you will know if you’re within a budget or overspending.
4. Buy first what you need
Have a list of the things you need before you go shopping and delay purchases for the things you want. Fight the temptation of unnecessary purchases even the items are on sale. What you need should be on the top of the list.
5. Automate your savings
You can link your payroll account to your savings so that you can easily set aside money.
6. Practice delayed gratification
You can practice delayed gratification by doing the 24-hour rule. You give yourself 24 hours before you purchase something unplanned. By giving yourself time to think, it helps you control unnecessary expenses.
7. Look for deals online
Online shopping has increased for safety and convenience. Make it a habit to buy essentials when there are special promos and discounts.
Make it a habit to buy essentials when there are deals and promos.
8. Pay yourself first
Each payday set aside an amount as your savings. The amount will depend on you. Being consistent is the key to having more savings.
9. Freeze spending
It is to stop spending on non-essentials. You can do it for a week or a month. You decide how long you will freeze spending. It will give you a feeling that you’re in control of your finances.
10. Have a small budget to splurge
On payday, there is an urge to splurge, and it is okay. We can reward ourselves on payday by having a small budget to splurge. It helps us to enjoy what we earn.
11. Emergency fund is a must
An emergency fund is equivalent to three to six months of your expenses. For example, Php10,000.00 is your total monthly expenses. Your emergency fund should be P30,000.00 to 60,000.00. If an unexpected incident happens, you have a fund that you can use.
12. Invest a portion of your emergency fund
You can invest a portion of your emergency fund in low-risk investments such as time deposits and bonds while you don’t need to use it. It is earning higher interest compared to a savings account.
13. Improve financial literacy
Financial literacy is having knowledge and understanding about the concept of earning money, savings, budgeting, and investing.
There are ways to improve financial literacy such as listening to podcasts, joining FB groups, watching YouTube videos, and reading books.
14. Have a side hustle for additional income
Your side hustle can be your passion. What skills do you have that you can monetize? Having two or more income streams will help you reach your financial goals fast.
15. Compare prices before buying
Are you planning to buy a new cell phone or a laptop? It is important to compare prices because you can find a good deal or a desirable amount of the same product. Doing it online is easier. Also, check the reviews before making a purchase.
Building good money habits is a choice. Your finances will improve as you deliberately decide to be better. You have the power to achieve financial success.
