A lot of the things we do on a daily basis are just learned habits. As the old adage goes, “man is a creature of habit.” Our brain goes on autopilot mode once the seeds of habits have been planted on our brain. Buying a $4 coffee on the way to work is an example. Spending extra because it’s payday is another. If not kept in check, these habits could become the seeds of a lavish lifestyle. The good thing is that much as you can build bad money habits, you can also deliberately start adopting smart money habits anytime. Once the seeds of good money habits have been planted, so will reap their benefits soon enough. Below we give you some examples of smart money habits you can start adopting today.
Make money management a part of your routine
If you value your financial life, you will spend ample time managing your money by budgeting, balancing your checking accounts, planning your small and big purchases, and so on. Ignoring money management just means that you don’t value money, and when you don’t value something, it goes away. If you don’t value your car by having it replacing oil when necessary, or having it regularly checked, then your car will not live long enough. Same goes with your pet, or anything you own.
Spend some time managing your money and it will stay in your life. Set a schedule for budgeting and updating your balance sheets. At first it will feel tedious but do it regularly and soon enough, it will become a habit which will feel much easier.
Save a percentage of your income every month
Saving a set percentage every month makes saving a no-brainer activity. Some people still have to figure out how much they should save… and that happens every month upon receiving their paycheck. Doing it that way makes it less consistent and tiresome; plus, it’s easier to get away from saving because you could easily think of bills and other expenses. Instead, set a consistent rule for yourself. Say, for example, 10% of your paycheck (which could vary every month), should automatically go to your savings account. No questions asked. It doesn’t matter if you have other expenses– you need to save that portion of your income. Remember our rule in saving? Income minus savings equals expenses.
Alternatively, you could set an automatic transfer from your payroll account to your personal savings account. That way, you’ll have no choice but to save that money. Just make sure you won’t dip into that account or everything’s just for nothing.
Pay your dues or debts every month
If you have debts to pay, it helps a lot if you have a payment plan in place which you could follow each month. Just like our savings strategy above, we also recommend making payments automatic so that you don’t end up procrastinating on your monthly dues. Set up an automatic payment from your paycheck to your creditor based on a payment plan, which could tell you how many months will it take to totally eliminate your debt.
Habits are either good or bad, and most of us have both. However, it would be a lot better if we have more good financial habits than bad ones. So go ahead and start adopting smart financial habits today. Your future self will thank you for it.