Research shows that it takes up to 66 days to form a habit. That’s roughly 2 months. One of the best habits that someone can have is financial habits.
Most people never get control of their finances. They always think that financial freedom is out of their reach…but it’s not.
I’m going to give you 14 smart financial habits to start today.
Creating financial freedom doesn’t just deal with money. Smart financial habits can have a lot of benefits. Here are some of the benefits:
- Decreases Stress
- More Free Time
- Improved Lifestyle
- Better Relationships
- Better Health
So, let’s dive into the smart financial habits to start today….
Tracking
Tracking is the first financial habit to start today. Most people have no idea how much money they spend. I recommend writing down everything that you spend in a month. This is basic budgeting.
Seeing your spending in writing can be shocking to many folks, but it is necessary. This will get you on the path to financial freedom.
Planning/Budgeting
Planning or creating a budget is another financial habit that you should start today. If you are not sure how to start a budget try the 50/30/20 Budget Method.
You need to put your money to work for you. Every dollar you make should have a purpose. Your outgoing money should go into these 3 categories:
- Needs
- Wants
- Savings
Goals
You want to set your goals. Setting goals gives your money a purpose.
Some of the goals of financial freedom can be an emergency fund or sinking fund.
Do you have an age that you would like to retire? Have you figured out how much you need to save to reach that goal?
It may take you some time, but start working towards these goals today.
Cut Spending
I can guarantee you that you spend money that you don’t need to. Check your budget and see where you can make cuts.
Do you really need cable and streaming services? Do you need an expensive coffee daily? Do you eat out for lunch every day? Many salon visits? Name brand items?
Try Meal Planning for your family. This will save you time and money.
Keep the expenses that bring you joy and cut the other ones. The savings will add up quickly.
Earn Extra Income
This one sounds harder than it really is. There are tons of side hustles that can make you extra cash.
Sell unwanted items in your home. Take on a second job. There are many side jobs that you can do online and in your spare time.
Pay Yourself First
Every time you receive a paycheck, you need to pay yourself first. This means set aside a percentage of your income for savings or investments.
Making yourself priority will simplify your life in the future.
Mindset
Changing your mindset can be as easy as making these financial habits a priority. If you focus on the long-term goal, you can make a change.
Just like when you are trying to lose weight: It’s not a diet, it’s a lifestyle.
Focus on the positive changes and keep working at them.
Get Out of Debt
Easier said than done. But people that succeed with their finances, do not have debt.
When I refer to debt, I am referring to bad debt. Not good debt.
Good debt is debt that results in an asset. An example of good debt would be a mortgage. A mortgage is the result of purchasing a home. Real estate is an asset.
Bad debt is debt that has zero asset. An example of bad debt is credit card debt. If you are in credit card debt, you have received zero asset. You have taken on debt without a positive result.
Automate Bills
Automating bills is a financial habit that is easy to achieve. All you need to do is set up automatic payments for each one of your bills. This way, you will never miss a payment.
You will always be assured that your credit is good. Good credit is necessary to acquire assets, such as a mortgage. Check out all the different types of mortgages. You will notice that most of them require a good credit score.
Review your Budget
Make a point to review your budget monthly.
Assess how you did. Did you overspend? Did you hit your savings goals? If your budget is not working for you, then you need to make adjustments.
Shops Sales/Coupons
Another great financial habit to start today is coupons and sales. I rarely pay full price for anything. I shop the weekly sales at my grocery store. I will stock up when a pantry staple is on sale.
I also don’t buy big ticket items without researching and then waiting for a sale. A great example of this is computers and TVs. We all know these items go on deep sales a few times a year.
Be sure to plan out your buying. It’s a lot easier than you think.
Emergency Fund
If you haven’t already set up an Emergency Fund , then start today. It is so important to have 3-6 months’ worth of living expenses in a savings account.
You never know when an emergency will arise. Be prepared.
Live Below Your Means
Just because you got a raise, doesn’t mean you should spend more money. Put that money to better use and invest it.
Try to live below your means.
Set your goals and start investing. Compound interest is how wealth is accumulated. If you are new to investing then start with investing basics.
Ignore Social Media
There is plenty of good information on social media, but most of what you see is fiction. Don’t try and keep up with the Jones’s.
Stop worrying about everyone else. Just because someone has a fancy car or a big house, doesn’t mean they have any money.
Worry about your own finances.
Start making smart financial habits today. What do you have to lose?
