Money Habits You Should Practise

Money Habits You Should Practise

The secret to financial happiness is to pay close attention to your money habits. Being conscious about your money habits can bring a certain level of awareness to your life that’s good for you and your bank account. We’ve compiled a few simple practices that you can implement in your life right away. Learn to make these habits part of your daily routine and watch how your bank account diversifies.

 

Keep track of your spending: Use an app or a journal to keep track of weekly spending habits. Start a list of the big expenses like mortgage or rent and then keep a list of all the extra items and places that you spend your money. Keep your receipts throughout the week and added in your journal. This will help you see where you’re spending the large part of your income. It’s easier to decide where to make changes when you have it all laid out in front of you.

 

Create a Budget: Once you start tracking your spending, you’ll also get a better idea of how to budget for certain things. When you’re planning, make sure that you are realistic with your income and always assume that your expenses are more than they are. Keep a budget for big costs as this will help you from using your credit card on big items. Try to use cash as your spending money and always leave extra in your budget for miscellaneous expenses.

 

Review your Finances: Keeping track of your spending and making a budget will get you on the right path. To stay on your path, it’s best to review your finances regularly. It’s important to consider the unexpected expenses that may occur or the occasional miscellaneous purchase.  If you are regularly reviewing your spending, then you can be prepared for future expenses. If you’re paying off a large debt, it’s always good to know where you stand in your payments and the outstanding amount left.

 

Extra Income: When you get a pay increase or bonus, make sure to save some of it first. Getting a raise isn’t a green light to exaggerate your lifestyle. Plan the extra income in your budget and save if you can. This may also be the time to speak to an advisor and inquire about investing your bonus.

 

Avoid Impulse Shopping: Learn to differentiate between your “wants” and “needs”. Asking yourself if you need the item or if you just want it. This question will slow you down and make you think about it. If you want the item, then wait a week and see if you’re still thinking about it and if you still want it. If it’s a big item, then be patient and learn to save for it.

 

Talk about your spending habits: Be comfortable talking about your spending habits and money in general. Ask a friend or someone that you trust to help you stick to your budget. Talk to them about your big purchases. Check-in with this person once in a while and be honest in your conversations. Spending money secretly can hurt your finances in the long run.

 

Like any new habit, practice,  practice, practice. When you notice that you’re deviating from your plans, pick yourself up and get back on track. There is no need to get frustrated and fall off completely. Learning new budgeting habits can make you more aware of your finances and that in itself can make you more confident in your long term and short term decisions.

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