It’s said that old habits die hard, especially bad financial habits. Overspending and no savings can make you struggle all year round— living hand-to-mouth and waiting for the next paycheck to come. If you want to break free from bad spending habits and manage your finances better, you have come to the right place.
At Box Financial Advisors, we can provide you with tailored financial advice and investment strategies to help you manage your finances and achieve financial stability while enjoying your today and saving up for your tomorrow. Remember that bad money spending habits can prevent you from achieving your financial goals, thereby leaving you vulnerable to unexpected emergencies and living paycheck to paycheck. Thus, you need to develop good financial habits to smoothly ensure you don’t wreck your financial future and sail through your present and retirement years.
To help you get started, here are some proven and time-tested good financial habits that can set you up for financial success. Based on our wealth of experience working with numerous clients of different backgrounds, career paths, and net worth, we can say that good financial habits fall under two categories
- Personal Finance
- Lifestyle
Let’s dig deeper to understand practical tips to get your finances in order and live a life of financial freedom:
Personal Finance
Spend Less Than You Earn
Reduce expenses to bolster savings. Just because you can afford something doesn’t necessarily mean that you need it and have to buy it. Therefore, you need to learn how to live within your means and overcome impulsive buying habits.
However, to live within your means, you have to take a moment to find out where you stand financially. Answer questions like, do you spend more than you earn every month? A habit you can change to save money each month?
Living a frugal life may seem challenging initially, but you will be surprised to see how much money you save by even small spending habits and adjustments.
Pay Off Debt
When building good financial habits, focus on going debt-free. Debt is expensive. Thus, it should be paid off fast instead of prolonging it. High interest rates and penalty charges can cripple you financially. And that is something you don’t want. Besides this, it can negatively impact your credit reports, score, and make a wrong impression on lenders if and when you decide to get a mortgage and buy a home.
So, as all things are connected, you should start paying off your credit card debt quickly.
Get rid of your debt to become financially stable. If you have not been successful in paying off your credit cards in the past, commit to paying more or a little extra than the minimum payment due. By clearing your debt, you can start saving more money and realize financial independence.
Keep Track of Your Spending
By tracking your spending, you can correct overspending almost automatically as you can see where your money goes, thus making changes if necessary.
Based on your findings, if overspending tends to occur often and on credit, opt for a cash-only spending plan.
Start Investing
While you are managing personal finances and spending less and saving more, you need to simultaneously have a plan in place that can grow your saved money. That’s where our financial advisors can help. Reach out to us, and our experienced advisor will structure investments for you and provide you with a solid financial plan to gain financial stability and a secure future.
One of the best ways to start investing and growing your money is contributing to an employer-sponsored retirement plan or opening up a Roth IRA or IRA and contributing regularly. Moreover, you can also set up contributions to retirement by enrolling in a 401 K plan. Start small if needed so that you start saving without feeling a big difference in your take-home pay.
Continuously Review Your Bank Statements and Credit Reports
Another good financial habit is to monitor and review your bank statements and credit reports continuously. This is because bank account fraud has become quite common. Thus, if you review your bank statements frequently, you can easily catch unauthorized transactions quickly so no fraudulent activity shall slip through. Similarly, keep an eye on your credit reports to see that all the changes in your debt management are recorded and your credit history is clean, ensuring there is no duplication.
Lifestyle Changes
In terms of lifestyle changes, follow the tips given below, especially when you are living paycheck to paycheck.
Rethink Several Times Before Making a Big Purchase
Before you spend on something hefty, it is advisable to think it through. You don’t have to be impulsive and buy things you think you need, but don’t. Evaluate the pros and cons of spending on something too expensive and out of your reach to determine whether or not it is worth buying. This habit will help in the long run as you would also think before purchasing anything and thereby, let go of impulsive buying habits.
Use Discounts and Coupon Codes When Buying Things
Change your spending habits by relying on discount deals and coupon codes to buy things. In this way, you will always be on the lookout for deals where you can save money. Also, when you develop this habit, you will automatically avoid spending carelessly. You will always wait before your favorite items are on sale or available at a discounted price. Thus, you will be getting what you want while saving.
Spend Wisely—Instead of Going on a Vacation, Consider a Staycation
Who says you can’t enjoy life if you’re not spending money freely. We suggest our clients spend wisely while enjoying life. For example, instead of spending a hefty sum on a vacation out of your home country, you can still have a great time away from home but on a staycation where you travel within your country and explore all that your country has to offer. In this way, you can enjoy holidays, learn more about your home country while saving big on expensive air travel and hotel check-ins.
For more information or quality and professional guidance on developing good financial habits and assistance with financial life planning, contact us today. Schedule a free consultation with our experienced financial advisor.
