Do you want to know the “secret” that takes you from financially stressed to financial success? It’s your money habits!
I recently heard a quote from Trish Blackwell, founder of the College of Confidence that perfectly sums up how good habits can reduce your stress. She said, “Good habits create stress resilience.”
The small choices and actions you make each day, week or month determine the path you will have with your money. Here are 8 money habits you can start today to put you on the path to financial success!
1. Set Financial Goals
People with good money habits start with a plan by setting financial goals. You should set financial goals that are short term and long term.
An Example of a short term goal can be to save $1,000 in a starter emergency fund.
A long term goal can be to pay off the mortgage in 5 years.
2. Make a Budget
Once you set your financial goals, now you have to make a plan on how to reach those goals. Making a budget is the plan that will help you with your goals.
No matter what your income bracket is, a budget is the foundation to achieving all your money goals and ultimately living financially free. A zero-based budget gives you a clear view to where your money is going.
3. Track Your Money
It’s one thing to make a budget each month but the big money habit comes when you track your spending each month. Each week, set aside some time to update your budget with your actual income and expenses.
4. Know Your Needs vs. Wants
“Do you need it or do you want it?”
That seems to be a new common question in our house as I’m trying to teach the kids needs vs. wants. It’s ok to spend money on nice things you want but if you’re trying to get out of the paycheck-to-paycheck cycle or set big financial goals, then it’s a good practice to pause and ask yourself if you really need it right now or if you just want it (and it can wait).
5. Find Ways to Save Money
You don’t have to be a natural saver to find ways to save money. Big or small, people with good money habits find ways to save.
I view saving money in two ways; how to find good deals and how to intentionally build a savings.
Finding good deals can be using coupons or buying generic items when shopping.
Intentionally saving can be building an emergency fund, sinking funds, and retirement accounts.
6. Have an Emergency Fund
An emergency fund is your backup plan to those unexpected expenses that pop up. Life is full of surprises. Having an emergency fund will allow you to pay cash for a car repair or a medical bill without going further into debt.
7. Destroy Debt
And speaking of debt, people with good money habits also hate debt! Credit card debt, student loan debt, car debt, mortgage debt – you name it, they try to stay away from it! Make a plan to get out of debt as quickly as possible.
8. Seek Guidance When Needed
Did you know you don’t have to be an expert at everything? Yes, that also includes your money. Having an open mind to continuously learn how to improve your finances is an important money habit.
That can be in the form of reading personal finance books, making a retirement plan with a financial advisor, or having a financial coach help you stay accountable with your goals. Having a team of experts will help you achieve your goals much faster than doing it alone.
Small Money Habits, Big Results
It can be easy to get overwhelmed with a list of things to do or more habits to start. That’s why I want to encourage you to start small with one habit first. Master that habit before you focus on the others.
My free Financial Wellness Checklist can help you master some of those habits. Whether you want to be better about tracking your money or grow your savings, the Financial Wellness Checklist will help you stay organized and provide tips along the way.
Give your financial confidence a boost – download your free checklist today!