Listen instead

Even if you have a job that pays well, additional sources of income, or financial inheritance, nothing good can happen if you don’t apply healthy money habits.

Having sound financial habits is about knowing how to use your finances for the right reasons, in the right way. You need to understand that every dollar has great value, whether it’s in your pocket or your bank accounts. A healthy money habit means practicing sound personal wealth management.

Learning how to manage your finances won’t be easy, and you won’t see results overnight or even after a couple of days. It will be a day-to-day process, but you’ll discover significant changes make a difference in your future financial outcome.

Start By Kicking Bad Money Habits

If you want a brighter financial future, you should first avoid the bad habits that keep putting you in tight places. But, what are these habits? Maybe it could be any or all of the following:

  1. Maxing out your credit card
    Plastic money, that’s what credit cards really are. They’re also known as swipe cards because you can easily swipe them whenever you see something that you must have without giving a second thought to the cost and consequences until a later date.There’s nothing wrong with using your credit card to purchase your daily essentials. However, using it to buy designer clothes, the latest smartphone, or a new pair of shoes (that you don’t actually need) is not a healthy habit. Before you know it, you’ve already maxed out your credit card, and your balance is way above what you can afford to pay. As a result, you’ll be drowning in debt.
  2. Buying impulsively
    Could you possibly be an impulse shopper? When you see something shiny and new, do you pine over it and eventually buy it? It wasn’t in your original plan, and you didn’t even need it, but you just had to have it because you like how it looked in the display window.Impulsive buying is also about going inside the store with only two items on your shopping list and coming out with two shopping bags. It is about, “Oh, this is what my friend bought the other day. She swears it’s good. Might as well get one and try it!” You weren’t planning on buying it, but you saw it, so you bought it. Impulsive buying is a common problem, and it is one of the reasons many are in debt.
  3. Shopping for no reason
    Shopping has become more convenient nowadays, with the many options available online. You can shop whenever and wherever you want, even at 3 am. You can shop even if you have no reason or just because you’re bored. Several small purchases in a day or week could total thousands of dollars. In a month, your debts will be sky-high.
  4. Spending more than what you have
    Here’s a common situation. You just received your salary, so you go straight to the supermarket to buy some things you need. On the way, you stop by your favorite shoe shop to buy that pair of sneakers you promised yourself last month with your next paycheck. Before going home, you decide to get takeout food from your favorite diner. You have the money, you tell yourself. After all, you did just get paid. But, now that you’re home, what’s left of your salary? You barely have enough to get you through the rest of the week. But, unfortunately, it seems that you spent more than what you have, so now you have to pay the consequences—more debt.

Practice Good Money Habits

Improving your finances and building your wealth takes a lot of sacrifices. However, if you intend to stay true to your goal, you have to start practicing good spending habits right away.

Consider implementing any of the following possible solutions. Of course, you don’t have to pick all of them at once. Instead, start with ones you think are doable that you believe will help you achieve financial stability, adding more good money habits as time goes on. Hopefully, they are also the ones that will have the most significant impact.

  1. Learn how to budget
    Creating a budget is more accessible nowadays with online budgeting tools and apps at your fingertips that make budgeting a lot easier. With a budget, you can manage your finances conveniently. Create and manage your budget in a way that you think will work best for you.If you don’t like downloading apps or using online tools, you can use free budget templates and spreadsheets in Microsoft Office and Google Drive. Get your Microsoft budget templates from https://templates.office.com and access the budget spreadsheets on google.com/sheets. Don’t forget to make a copy of the Google budget template so you can edit it for your own needs.You may also want to use a budget calculator, especially if you want help allocating money at the right time to your expenses to avoid overdraft and late fees. CalendarBudget shows you what money should be in your account on any given day, including into the future. This makes it easy to see the best time to pay your bills. You can avoid paying your bills too early, watching for the mid-month lows to prevent overdraft. Or move things around in your budget to pay bills on time and avoid late fees. Ensure that you include all your essential expenses, such as bills, food, transportation, and housing. This will allow you to control your spending because you know which expenses should be prioritized and put other expenses on hold until you can afford them.
  2. Save – Pay – Spend
    Follow the Save-Pay-Spend practice.
    Typically, after receiving your salary, you pay your bills first, and then after that, you buy the stuff you need. After that, whatever you have left of the money is what you save.What you should do instead is set aside an amount for your savings before spending on anything. It doesn’t matter how much you set aside as long as you do it regularly. Start with small amounts like $25 or $50 and when you’re ready, increase it to $75 or $100. After one or two years, you’ll have saved enough and improved your personal financial growth.
  3. Don’t neglect to pay your debts (track your credit)
    Boosting your personal wealth will be more challenging if you’re swamped with debt. So, prioritize paying your debt over any unnecessary purchases and set yourself to make regular payments until the debt is gone. If you have several, pay off the ones with high interest first and then move to the more affordable ones.For example, if you have student loans, make them a priority. First, schedule your payments according to fit with your budget (i.e., when it’s payday). Then, track your payments manually using a spreadsheet or your online budgeting app. CalendarBudget can help you identify any money you can free up to pay your debts off sooner. If you don’t have student loans, but your credit card debt has ballooned, focus on paying your debts off. Use CalendarBudget to track all of your accounts, including your credit card and other loans, to help track payments and determine the best way to pay them off sooner.
  4. Track your expenses
    Knowing where your money goes is crucial if you want to spend wisely and save. There are three ways to track your expenses:

    • Keep a list of your regular monthly expenses. To do this, you simply have to look at your budget and how your money is moving every month
    • You can use a simple spreadsheet or choose any of the apps and tools available online, or you can record your expenses in a notebook, journal, or smartphone
    • Pay attention to your credit and debit card expenses, receipts, and statements

      Tracking your expenses will help you identify any damaging money habits and ensure that you aren’t spending more than what you are earning. It’s an excellent start to improving your financial practices and their outcome.
  5. Automate bill payments
    How many times have you forgotten to pay your bills? Most likely more than once. It’ll be far more challenging to catch up and get them paid off when unpaid bills pile up.Use an automated payment app to help you pay your bills on schedule and ensure that you don’t rack up more debts. Several tools can set up your savings account to automatically pay your bills on or before their due dates. In addition, you can arrange with most businesses to auto-charge your Credit Card for your monthly payments before they are due. Finally, you can make similar arrangements directly with your bank to have them automatically paid through your savings or checking account.
  6. If you have enough time to earn extra money, find another source of income. You can do so even if you have a full-time job because there are numerous options to choose from online. It can be pretty challenging, but if you’re determined and know how to manage your time wisely, you’ll be able to pull it off.
    Choosing the right part-time business or job is also essential. Here are some options to consider:

    • You can open an online shop. You can focus on one product or be a reseller for an established product line or brand.
    • You can be a freelance writer, editor, graphic designer, or virtual assistant. You’ll find a lot of choices online. Visit indeed.com or LinkedIn to check out some options. 
    • If you have a property that you’re not using, such as a house or a condo unit, rent it out. The monthly rental payment is a good source of extra income. Vet the tenants well first.
    • You can go into affiliate marketing. It makes for good passive income.
    • Earn from what you love to do in your spare time. For example, if you use your free time for sewing, you can sell the items you make. If you go on adventure trips on weekends, you can apply to become a part-time guide in one of the parks near your area. You can take quality photos of your adventures and sell them as art or for others to use. You can even publish an eBook if writing is something that you do regularly.
  7. Invest wisely
    Investing in bonds, stocks, or real estate is not only for the rich. It is for all people who want to improve their financial stability. All you need is a solid plan worked out with your financial advisor. They can help you identify which assets you should invest in that fit your financial needs and risk level.
  8. Give when you can
    Giving back will not only help the community, but it will make you feel good as well. Several studies have indicated that volunteering helps lower stress, improve mood, and make you happier and healthier. One study even said that people who like to give back often earn more money.

If you’ve been spending more than you are earning and saving, it’s time for a lifestyle change. Changing your spending habit is the first big step; the rest will follow. Don’t rush things, though. Instead, take it one step at a time. First, get rid of your bad money habits and then focus on instilling good money habits in your daily activities.

About the Author:

Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she uses her time reading books and bowling with her family and friends.