7 Habits that Will Transform your Finances
Have you found yourself falling into some negative financial habits lately? The truth is, it can happen to anyone, and before you know it you may feel like you are in too big of a hole to get out. Well the good news is, just as easily as you found yourself in that hole, you can implement some positive financial habits and find your way out. Take a look at these 7 habits that will transform your finances and lead you on the path to financial recovery.
1. Start keeping receipts.
It may be habit to toss your receipts, but try keeping them for 30 days to get an idea of just how much you are spending. It is way too easy to swipe a card these days, and the end result is us feeling like we aren’t really parting with our cash. Instead save receipts to get a visual of how much cash is going out.
2. Track your spending for 30 days.
Keep a journal that tracks all of your spending for 30 days. Whether it is a dollar purchase or $100 purchase, track it. At the end of the 30 days, you will have a decent idea of where your money is going towards. Bills? Food? Fun? The journal will give you a realistic view of your spending so you can start making changes.
3. Set a weekly budget.
Once you get an idea of where you money is going, you can start setting weekly budgets. Be realistic about the money you are working with, and decide what your immediate weekly needs are. Set a budget at the start of each week for food, bills, fun, etc. Write your budget on paper so you have something to refer to and stay focused on during the week.
4. Try the envelope system.
A great way to budget is to start using the envelope system. Use one envelope for each need you have. Examples for envelopes could be: utilities, groceries, clothing, fun, mortgage, etc. Place the allotted amount you need for each week/month in the envelope and spend it as needed. When the envelope runs out, you are not to take from another envelope or funds to replenish. Only replenish at the start of a new week/month.
5. Find an “accountability friend”
It is always easier to manage money and curb your spending when you have a friend on your side! Find a friend who is just as serious about becoming financially responsible as you. You can meet weekly (or as often as you need) to go over your budgets, share tips, and offer each other plenty of support.
6. Find non-monetary ways to reward yourself.
Many times we feel like we deserve to spoil ourselves. And while we do deserve to be spoiled for our hard work, we don’t always have to do so financially. Treat yourself in non-monetary gifts such as a visit to a local museum on freebie days, nature walks, a good nap, bath, or other treat that doesn’t require money. You can still feel spoiled and rewarded without spending a dime.
7. Pay yourself first.
Regardless of your income, you should always be paying yourself first. This means setting aside some of each paycheck towards savings. You deserve a secure future, and a sound savings account will help you achieve that. Take a small percentage out of each paycheck (and gradually work your way up to a larger percentage as you can) and place it in a savings account you don’t and won’t touch.
As you can see, these 7 financial habits are easy ways to get back on financial track and start enjoying your financial freedom. Give them a try and see if they can’t help you get out of the financial mistakes you have found yourself in.