While one positive financial decision can be a step towards solvency, positive financial habits are the building blocks to a sustainable financial future.
Habits, once established, put financial decision-making on autopilot — which, in turn, ensures you won’t fight a daily battle with yourself over temptation and security. After all, short-term temptation has a certain edge over long-term security.
So what habits can you establish today that will create a smooth path towards a secure financial future? You can start with these 5.
Consider Yourself a Creditor
When it comes to taking care of our financial responsibilities, we tend to allow outside creditors to crowd out any picture we have of our long-term financial goals. We pay them, allow the rest to bleed out in ways we generally don’t recall later, then, if anything is left, we might stash it in our savings with the thought that we somehow served ourselves well that month because we were able to put something away.
It’s time to put funding your savings goals on the same level as paying your mortgage, keeping your electricity turned on, and buying groceries. You are funding an expense that should be paid along with your other bills.
So start paying yourself first. Have your paycheck deposited into both a savings and checking account, make a recurring transfer, contribute a set monthly percentage to your retirement accounts – any way to automate will ensure you don’t stand in your own way of saving
At the same time, be business-like about paying your credit card bills and other debt payments. Set up online payments so you don’t have to worry about being late. And consider canceling your credit card if you can’t stop running up a high credit card bill.
Give Your Money a Job
We all know its good to save, but save for what? Without a goal, or bigger picture in mind, the entire process seems to just be a practice in self-control and deprivation. And who really wants to participate in that?
Establish short-term and long-term financial goals with dates and specific steps attached. Revisit them often, and make sure that your plan of attack is still on track with the intended outcome.
Getting in the habit of intentionally giving your money a purpose will make saving the only logical step – and one your don’t have to wrestle with yourself to complete.
Check In On Your Money Beliefs
Do you think of money as a source of contention and something to struggle with? Or do you view money as a positive means that simply serves as an aid in establishing the life you’d like to have?
Regardless of where you fall on that spectrum, your outside experience likely mirrors your internal thoughts. Therefore, it’s in your best interest to get to the root of what you think about money, where those thoughts have stemmed from, and how you can right them to reflect the type of relationship with money you’d like to have.
Revisit your emotional connection to money often. You’ll likely be able to make internal changes that have external results.
Tap Into the Power of Knowledge
When we know better, we do better. Therefore, the more educated we are about money matters and best financial practices (for our particular situation, of course), the more likely we are to take charge and manage our finances in a positive way.
Think about how many people don’t invest their money because they are intimidated by the prospect of relinquishing control in a system they don’t know much about. Inject knowledge and maybe some expert advice into the equation and they’d probably feel empowered enough to take the next step.
Get in the habit of learning, asking questions, seeking help when needed, and staying on top of your financial situation. You are far less likely to end up in a sticky financial situation if you’ve established a foundation of knowledge that would negate any negative decision-making you may fall into.
Start With Awareness
Guilt is the result of decisions made at a time when we had our awareness turned off or turned down in volume.
Have you ever driven home lost in thought, only to realize you don’t remember any of the drive once you’ve reached your destination? That is a complete lack of awareness.
Start getting in the habit of recognizing the smallest parts of the present moment, even if you’re doing something mundane like washing the dishes. Pay attention to the motions, how they feel, etc. Once you are able to actually tune into the present moment, you are more apt to make decisions with complete awareness – not driven by fleeting emotions or knee-jerk reactions you don’t recall after the fact.
Getting into the habit of being fully aware brings the power back to the moment and allows you to make decisions that you won’t regret down the road.
What habit changes are you prepared to make in order to secure your financial future?
Last Edited: 19th February 2014