Habits can be hard things to shake off. Many of us still live lives dominated by habits we learned from the environment we grew up in, or from times when we had very little responsibility. Instead of focusing on just getting rid of those habits, its a much more fruitful task to instead think of the habits you should be working on..
Theres no time like the present to start trying the habits were going to mention below. If you use money well, the benefits continue to grow over time. The longer you put them off, the more benefit youre going to miss out on. Start making the little changes now that see you with more money in your pocket at the end of the day and a lot more money in the bank account years from now. Think of some of your worst money habits, like smoking for instance, and think of how much money youve spent on cigarettes in all those years. Let that be the motivation you need to stop procrastinating and start working on your money right now.
Know where your money goes
Before you can start patting yourself on the back for keeping more of your money, you need to know what kind of figures youre actually playing with, here. Take the time to look over your bank account and see what bills and subscriptions youre paying. Then take a month or so where you use budgeting apps to track every single time you spend cash or use your debit or credit cards. You need to inform your approach to saving so you can actually identify where youre spending too much. Simply being mindful of where your money is going and help you spot the little habits that are costing you a considerable amount in the long-run.
Always assume a rainy day will come
When you start budgeting, you dont just see how much money you have and how much you spend, either. Youre going to be able to assign cash on the side for securing your future. This is your financial development money. If youve taken care of all your debts, then the next place that development money should go is in creating yourself an emergency fund. In a vast number of cases, financial trouble and the debt spiral begins when unexpected costs have a sudden impact. For instance, if you lose your job. Thats why you shouldnt consider your emergency fund done until you have from three-to-five months worth of wages. You need to prepare yourself to weather the fiercest of storms.
Curb your impulses
One of the ways youre going to free money for that development fund is to recognise that you might often spend when you have no reason to, at all. You need to take the time to identify your spending triggers and cut them out of your life. For instance, if youre buying something and you find you cant decide between two completely different purchases, realise that you cant decide because you dont really need either of them. With that kind of thinking, you might decide to buy neither. Everyone has different impulse buying triggers. Its all about realising when youve impulse bought and being mindful in order to identify just what led to it. Once you learn your impulses, its a lot easier to simply ignore them.
Control your food
Food isnt an impulse buy, but its certainly something that the majority of us spend too much on. Saving money on your food is as simple as planning how youre going to buy it. Creating a meal and finding exactly the ingredients you need isnt just cheaper because youre not picking up things you might need but truly dont. You can also use those meal plans to buy certain items in bulk, meaning you dont have to keep spending by buying refills more often. It also lets you think of certain ingredients you can use in more than one meal. We often buy too much produce to use in one meal alone so you can spend less on more meals while ensuring youre not wasteful.
If you want something, get a deal
We know that there are sometimes you want to buy something out of the ordinary and nothings going to deter you. Planned purchases arent inherently evil. We need new clothes, we need to replace old and broken furniture. We even deserve some store-bought entertainment from time to time. But, whatever you do, dont buy it at the recommended retail price. With the internet, its so much easier to find vouchers and deals for just about any item you want to buy. As far as media like books, movies, and videogames are concerned, theres rarely a reason to not buy second-hand either. You never have to spend full price on something you want.
Have a day for bills
Before, we mentioned taking the time to look over your bank accounts to see where your money goes. When you do that, ensure that youre listing the name and purpose of every bill and subscription you pay. Keep updating that list if you take on new things or cancel old ones and look over it every year. You should have a day dedicated to slashing bills every single year. Put it on your calendar. This day will involve using sources like an energy comparison site to see what other offers are on the market and deciding whether or not you should switch. It will also include calling up your service providers and negotiating with them to see if you can get a better bill. Its rarely a correct assumption that youre going to be getting the best deal from the same agreement you made last year.
So, far, weve covered a lot about making savings, but what about actually contributing to your future? The reason that you want to get started early is because building future finances yields more in return the longer you do it. That doesnt just go for savings accounts. In fact, its not unheard of for savings accounts gains to be eclipsed by inflation. No, what you want to start doing now is investing. No matter how much money you have, you can start investing. Just learn the basics and you can start making serious gains. In ten years, for instance, investing 25 a month on the Legal & General UK 100 Index fund can result in a return value of 3,909. The more you get back from investments, the more you can invest back in and continue growing and growing your returns.
Contribute to your retirement now
Your retirement is an investment you should start now, as well. You wont get the immediate gain since you wont be accessing it until youre at least 55. But when youre older, you dont want to have to worry about making money as much. Save yourself the trouble. Contribute more if your employer can match your contributions and calculate how much youre putting aside for your retirement. Dont give yourself something to stress over when you should be enjoying your later years.
Consider automating more
If youre the kind of person who has trouble tracking all the ins-and-outs of their finances and youre pretty sure youve always forgotten something, then its time to get organised. Think about automating not just your bill payments but also your savings. If youre ever worried that automating too much can leave you with too little money, then make a financial network map and keep it somewhere visible. If you have a whiteboard in the house, keep it there. If you have a computer you work at, make it in sticky notes and plaster the map above it. Whether or not you end up automating, its good to have a constant visual reminder of everywhere the money the money needs to go.
Put bonus cash to good use
When you get something like a surplus of birthday cash, a bonus, inheritance or any other forms of extra cash, its easy to start thinking about all the great things you can buy. Certainly, theres nothing wrong with affording yourself a treat. But it can save you a lot of hassle if you use that surplus cash to keep ahead of debt, to complete an emergency fund early, or to pump up your investments. You need to think about the value of what youre tempted to buy versus the value of fulfilling your financial plans early. The fact is if you manage your money well, in future youll be able to buy those treats youre considering without it impacting your financial health much at all.
Habits can be hard things to shake off, as you read right at the top. Whats why you should start working on formulating them right now. It will take time for them to sink in. However, when they do, youll have helpful money practices that you will be carrying with you unconsciously for years to come.