Financial stress is one of the main burdens that faces the everyday person. Whether you barely make ends meet or you’re a multi-millionaire, the stress of organizing your finances and making good choices can be never-ending.
If you have never consciously changed your financial habits before – or you have, and it simply didn’t work – you are in the right place. In this blog you will learn five actionable financial habits to adopt as soon as possible, so you can make solid choices when it comes to your money.
Let’s get started: here are 5 financial habits to adopt ASAP.
- Limit your luxuries by asking yourself: ‘Is this worth all my hard work?’
It is easy to get into the habit of living an expensive lifestyle. Clothes, shoes, beauty treatments, a nice car, luxury meals out – all of these add up to huge numbers monthly and annually. That doesn’t mean you should never do nice things or treat yourself, but it does mean you should pay attention to your luxuries and try to limit them to a reasonable budget.
By asking yourself, ‘Is this worth all my hard work?’ you can quantify whether a luxury item or experience is worth it for you. You could calculate how many hours you worked to make the money you’d spend, and figure out if those hours add up to the thing you are buying. Often, this will be a wake-up call for people who have become accustomed to a luxury life!
- Download a banking app that allows you to review your expenditure.
Banking apps aren’t just helpful for tracking how much money you are receiving and spending; they can also help you categorize your spending in a more useful way. For example, apps like Monzo help you categorize your expenditure into easy sections, such as:
- Essentials, such as household bills and groceries;
- Work related, such as supplies, gas, your car, and work clothing;
- Food and drink outside of your grocery shopping;
- Beauty treatments or products;
- And other expenditures like trips or non-essentials.
By compartmentalizing your spending, your habits will inevitably change. You will realize where you are overspending – and you might be surprised! – which can lead to a better lifestyle all round.
- Research all your options before buying into debt relief schemes.
Debt relief can be a lifeline for many people around the world. If you have been through a period of financial hardship, you might be trying to find ways to dig yourself out of debt and turn over a new leaf.
There are some highly effective debt relief schemes like Safety Net Credit, while others are not what they seem. When you are searching for a way to get out of debt, don’t let your desperation override your common sense. Get into the habit of doing extensive research before you sign up to any money lending scheme or line of credit. This is for your own safety, and it will help you be financially prosperous in the future.
- Invest in annual financial advice if you can.
Financial advisors are fantastic for instilling good habits in people. If you can afford to get a yearly consultation with a financial advisor, you could make your money back easily in savings. Financial advisors spot weaknesses in your expenditure and financial habits, and can help direct you into the right course. You can ask them absolutely anything, and their years of experience will contribute hugely to your financial wellbeing.
In addition, a financial advisor can help you greatly on the next step: setting financial goals for the next one, three and five years.
- Set one, three and five-year financial goals for yourself.
Setting financial goals is probably the most positive change you can make to your financial habits. Having something to work towards, however minor, is the best motivation.
You should take a hard look at your habits and your earnings, and try to come up with a savings goal for the next twelve months. It could be something as simple as putting an extra $20 in the bank each week, which comes out to $1,040 in a year!
Next, you should start thinking even bigger. What do you want to achieve in your life over the next five years? It could be putting down a deposit on a home, buying a car you’ve always wanted, or travelling the world. Whatever it is, manifest your dreams by starting to save for them today.
Overall, financial habits can be hard to break and form – but with this guide you will be on your way to changing how you spend your money!