Establishing good financial habits is easier said than done. Having a lot of financial burden on your plate right now can make it seem impossible to see your financial future from here. If you start implementing good habits and making them part of your daily financial choices, you won’t have to worry about the future as much. Here are a few habits for you to pick up that will make your financial future a little less foggy.
Find a balance
When you are young and just starting out, it’s easy to spend your money as fast as you earn it. But that habit doesn’t last forever, and you painfully learn that you need to develop a budget. Finding a balance between saving, investing, and spending is key. You may think you already have good financial habits because you stuff most of your money into a savings account and spend only what’s necessary; but believe it or not that’s not the best option. That’s why it’s important to also invest your money into something so that it works for you and is not just sitting in your account collecting dust. And it is okay to spend a little and treat yourself. Be disciplined but not too controlling of yourself.
Treat investments like a bill
Investing can be hard to do, especially if you are feeling like you can barely make ends meet as it is. Investing is so important to your financial future. Experts recommend investing 10%-15% of your annual income. That may seem like a lot to fork over, but there is a trick to making it happen. Treat your investments like a bill and pay into it each month. Whether you are investing into the stock market, a brokerage account, or 401k if you are sure to put money in every month, you will thank yourself later. If your work offers a 401k you can have them take your investment money right out of your paycheck so you won’t even notice its missing; making it a bit less painful.
Make and stick to a budget
The word budgeting sounds like it comes with an orange jumpsuit and bars, but in reality it’s not that restricting. Think of it as guidelines to stay within for your own protection and benefit. There’s a reason your mom made the rule that you can’t have candy for all 3 meals, it wouldn’t be in your best interest and would ultimately harm you. By not giving yourself a budget or set of spending rules, you could end up with a severe financial tummy ache. Be sure to reassess your budget quarterly and make adjustments as needed. If you can loosen up a little, let yourself, but also be honest if you see you need to button up in some areas. Don’t think of a budget as a strait jacket, think of it as a seatbelt.
Everyone has different financial situations and goals, and they tend to change and fluctuate depending on where you are in life. If you implement good financial habits and stick to them, even when your financial situation changes, you will set yourself up for future and present financial success.