All of us have heard the well-known phrase ‘money can’t buy happiness’ since childhood. And this old cliche might be true to some extent. However, one cannot deny that the key to a successful personal and financial life boils down to good money habits. With that said, which practices have you been reinforcing through your life – good or bad? Are these habits leading you to long-term financial success or knocking you down? Whatever the answer is, the good news is you still hold the power to improve your situation. Therefore, if you have squandered an opportunity to make a New Year Resolution or missed any other peak time to reset meaningful goals, don’t fret. It is never too late for a clean slate.
Like any other rewarding activity, you can’t get rid of bad money habits and develop good practices overnight. Moreover, the timeline differs for each person since everyone has their own set of financial objectives. However, consistent steps that turn into second nature with time can make a massive impact on your financial health.
The following guide pinpoints some healthy habits that can turn your financial situation around. However, you don’t have to perforce yourself to follow each of these tips. Instead, begin by one, master its art, and then move on to the next ones. The more financial habits you develop, the more you will gain momentum to the path of success.
- Make Sound Investment Decisions
Several people feel intimidated by the thought of investing; however, it is a safe bet. You can either invest in some assets, bonds, or stock markets to secure your future. Similarly, you can invest your money in the real estate business and buy rental properties to generate constant earnings. However, it is best to get attorney support if any legal issues arise during real estate transactions. Although some people consider hiring real estate agents as they are good with negotiation. However, what will you do if you find out that the property you purchased for renting already has a tenant living in it? Or, if you want to add some clauses of a mortgage in the purchase contract, you might need an attorney’s help to draw such agreements.
An experienced attorney on your side can act as a shield of protection and put your interests above everything else. That way, you won’t have to worry about the security of invested money and enjoy peace of mind.
- Create a Realistic Budget
If there’s one thing that can guarantee healthy financial growth, it is budgeting. Without a proper budget in place, you will have no idea where your hard-earned money goes, and soon you might go bankrupt. So prepare a realistic budget to determine the cash inflow and outflow from every account.
One best approach is to create a list and divide it into three categories. For example, make the first category of regular expenditures and include the utility bill payments, mortgage costs, groceries, and loans. Then, add occasional expenses such as holiday presents, home improvement costs in the second category. And lastly unforeseen costs such as car repair due to accident or appliance replacement in the third one. In this way, you can fine-tune your expenses moving forward.
- Track Expenditures
It doesn’t matter how many weeks or months you take to get accustomed to good financial habits. What matters the most is you recognize bad habits, figure out ways to build sound patterns, and develop a roadmap to keep you on the right track. For this reason, it is imperative to keep tabs on your daily spending. Then, with a proper financial plan, you can figure out where you lie in your financial growth journey and how much you have deviated from your priorities.
Now, this may sound like a daunting task since, at the end of every day, you might get hit with harsh realizations. However, try to be upright with yourself. After all, how would you know the amount of cash left with you if you don’t track the daily expenses?
- Avoid Impulsive Decisions
You might have come across a point in your life when you were almost broke. Perhaps because of poor financial management habits. And you might wonder why some people never experience such similar situations? It is because these people know where to limit themselves and don’t act upon their instincts.
Are you one of those people whose morning doesn’t start unless buying coffee from the nearest café? Or are you guilty of purchasing bagels on your way to the office every day? If yes, then you might need to drop these habits to develop sound money management skills. Similarly, while making a quick run to the grocery store, don’t get carried away. Instead, stick to those items only that are necessary. And the same goes for online shopping. Modern sales tactics entice customers in a way that they end up buying products even if they don’t need them. So first, consider asking yourself, is it worthy of buying? If not, remove that item from the cart. Next, cut down a few expensive shopping brands. Replace them with reasonable ones. You won’t even realize that by doing so, you can curtail redundant expenses to a large extent and will feel like giving a pat to yourself.
- Avoid Food Take-Outs
According to a well-known saying, if your habits don’t align with your dreams, it’s best to either drop those habits or make new dreams. Retrench spendings which are of no use – meaning cut down the ones that are no more a source of enjoyment and don’t line up with your financial goals.
For instance, instead of dinners at restaurants and food deliveries, try preparing the meals at home. Sure, regularly home-cooked meals can get boring; however, considering the ongoing pandemic and work-from-home culture, it is best to stick to this option. Fortunately, it is easy to cook delicious and restaurant-style meals in the present day by surfing the internet and choosing the correct recipe. However, you can pamper yourself with occasional take-outs or go for dinner some weekends to enjoy the freedom as well.
The reality is, it might not be a smooth experience, and you will not be perfect every time. It is okay to have slip-ups; after all, you are a human. Don’t go hard on yourself; instead, identify your mistakes and figure out a way to compensate for them. It takes time to let go of your bad money practices and create good ones. One best approach is to follow the 21/90 rule. According to it, if you stick to one of these habits for 21 days, you are well on the way. And if you continue to practice this habit for three more months, you can make a permanent lifestyle change. Remember, it doesn’t matter which good money habit you choose. All you need is to ensure consistency, and the path to healthy financial success will be more like a stroll than an uphill slope.