Creating Healthy Financial Habits.

So how do we go about creating healthy financial habits and making them stick?

We all develop regular habits, some good and probably, a few that we should shake.
Nevertheless, when it comes to your finances it can become very easy to get
complacent and let things slip.

So below is 8 tips and ideas to take on board and helping us in creating healthy financial habits in 2021.

1: Once a week – Do a financial health check catch up

Each week name a specific day and time you will ALWAYS review your finances. 

We all live busy lives and so it’s imperative to nominate a specific window to assess exactly where you stand. 

Make this health check catch up part of your weekly routine, because it will help you avoid being caught out by an unexpected incoming bill.

Keep your details up to date, if you have different emails or recently a new phone number make sure you update them on important documents and subscriptions.

A potential overdue payment that will result in a higher interest charge on your account.

2: Daily – keep it Simple and Automate.

Whenever possible, pay online and for regular monthly payments, like for rent or mortgage payments. 

Make sure you can arrange for auto payments, so they can’t be overlooked.

This helps take the stress out of what needs to be paid weekly, fortnightly or monthly.

Keep a calendar reminder and note all your upcoming regular payments and get reminders on your phone. Particularly if they are quarterly payments.

3: Daily – Be organised

• Open all your bills when you receive them and keep them together in one file, so you know where they are, what you owe and when.
• Always read your incoming credit card statements carefully. 
• Mistakes do get made and it’s a good habit to check all your payments first before you settle your account.
• Check your bank account regularly if subscription and or payments you have forgotten about and your balance

4: Daily – keep your wallet very minimal.

Don’t carry around wads of cash. Keep a minimum amount on you to pay for daily expenses, but not enough to let you be tempted to overspend.

If you regularly buy a coffee out on your morning walk or trip to work carry only that amount so not tempted to spend more, budget for it

5: Monthly – create a budget and re- evaluate.

Look at the big picture and decide in advance what budget you should allow to spend each month. 

Break it down to Household, Personal, Home, Transport, Socialising, Savings etc. 

.Then, stay true to your pre-set budget and review it weekly.

Budgets can be boring for some of us, so inspire yourself for an upcoming event to be part of your budget.

possible and always compare costs carefully before making any purchase.

6: Daily – cut out ‘extras’ or limit them.

It’s all too easy to overspend as soon as you leave the front door.

Buying the morning coffee on the way to work, maybe limit to every second day.

What about, lunch every day, cigarettes, drinks, magazines, gambling, and so on. They can all be either reduced or cut out altogether, so just do it. 

Put the money you save into your savings fund instead.

7: Monthly – pay off your credit card debt.

If you can’t afford to pay it, you can’t afford to buy it! 

Better still, just use a debit card instead, so you don’t run up credit card debt at all.

Credit cards are not bad things, they should be used as emergencies or can be used as business expenses.

Try to not use them for frivolous purchases or for cash out.

8: Daily – Reflect and think about your end goal.

We all daydream – owning a dream home, a dream boat or car, going on a dream holiday. 

A dream is the ideal way to focus on your personal financial plan to make your dream become a reality.

This can really help when we are tempted to deter off our plan and savings goals, especially when we want to buy extras.

Here are some ideas you can do on a daily basis rearrange them to suit your style:

Day 1 – Track one expense at a time

Nobody likes to budget, especially if it’s a financial skill you aren’t accustomed to, but there’s no better way to get a handle on your financial health than tracking your expenses.

One trick, to avoid expense-tracking overwhelm, is to develop the habit of tracking one expense category at a time. 

Start by picking an expense in a financial category you feel might be a problem area, and do your best to track every expenditure.

Whether it’s meals, entertainment — or how much you’re spending on insurance — take a few minutes to thoroughly track one area of your expenses. 

Proceed to brainstorm ways you might be able to reduce those expenses, and you will find it gets easier with time.

Day 2 – Automate your savings

The term “savings” sometimes gets a bad rap. Perhaps it’s because most savings accounts have an interest rate that hover somewhere around .01%.

But “savings” is really just about spending less than you make, then finding constructive ways to use that surplus.  

Such as paying off bad debt or looking for investments. 

The best way to boost the amount of “savings” you can accrue each month — without earning more — is to automate your savings.

This could be done in a variety of ways:

• Setting up automatic monthly transfers
• Saving your tax refund
• Make regular savings “deposits”.
• Portion your direct deposit (or revenue streams) into separate buckets.

Day 3 – Prioritize your goals.

Setting financial goals is just the first step to building wealth. The real “secret sauce” comes when you prioritize those goals in an actionable order.

Make a list of all your financial goals, then prioritize them in order of importance. 

Then make a solid plan for each of the top-three goals. 

By establishing a clear distinction between wants and needs, and earmarking which financial goals you’ll start working on, first, you’ll lay a solid financial foundation. 

This will help in creating new healthy financial habits.

Day 4 – Create a master shopping list.

We’ve all done it; we’ve gone shopping with a “list”, only to find ourselves buying many things we didn’t actually need. 

Or we find ourselves going back, to the same store, again and again, wasting gas, time and money.

If you find this is you time and time again online shopping and having it delivered could help you break the habit of overspending or forgetting items.

This also could save you some time, or working on other important things that may need to be done or more leisure time.

There are many helpful mobile apps that you can use in this endeavor; Our Groceries is a popular choice with great reviews and an easy-to-use interface. 

But get in the habit of consistently building targeted shopping lists in which you buy nothing but what’s on the master list.  You’ll not only spend less money, but be far less stressed in the process.

Day 5 – Ask for discounts (always)

Doesn’t matter whether it’s your phone bill or that department store shirt you’ve got your eye on.  

Chances are you can often get a better price (on almost any product) or service simply by asking.

Many companies offer loyal customer discounts, a feature many “loyal customers” don’t even know about. 

Other businesses will offer “bundle pricing” if you decide to sign up for a suite of services.

Sometimes this is as simple as asking if there’s a “better price” on an item.

 You won’t always succeed, many times a discount isn’t available or refuse to buy unless it is discounted.

If you get in the habit of constantly asking for a discount, you might just find a whole, new source of passive income.

Day 6 – Up your financial IQ

Financial education isn’t something you achieve overnight. 

It isn’t something you finally attain, then no longer have to learn more about. It’s a continual pursuit, in which you learn now just how to spend less.

Discover how money actually works, and the keys you need to build long-term wealth.

Read books on investing. Scour blog posts on financial literacy.

 Listen to podcasts on investing. Make it a weekly (daily, if you can) habit of constantly learning the ins and outs of money. 

Might just the healthiest financial habit of all.  Bring back your poser of owning your financial future.

Day 7 – Show gratitude

Though it may not sound like a financial habit, expressing gratitude for the level of prosperity you do have.

This helps not feeling like a lost cause or feeling that your goals are just so far away

Instead of wishing that luxury sports car or big SUV you want would drop from the sky.  Gratitude can help you avoid “impulse buys” that may temporarily make you feel better, emotionally.

 Impulse buying  won’t help you reach your financial goals.

Not to mention it can also help you feel more empathy toward those less fortunate. 

“Bad habits are overcome by good habits”

Developing and creating healthy financial habits isn’t just about checking your account balance and saving more than you spend.

It’s about noticing you already do have financial habits in place. 

It’s your job to determine which habits serve you, and which stand in your way.

But if you become more attuned to your relationship to money, take small actions to derive more savings where you can.

Be grateful for where you are financially, you might just find these productive financial habits do more than boost your bottom line. 

They might just change your life.

Reference:

Fortune Builders