When it comes to money there are a number of habits that are worth forming. Here are money habits that never get old.
Living Within Your Means
Living within your means is a good idea because you can stop yourself going into unnecessary debt, but there are times when debt isn’t bad. For instance, paying for further education to increase your future earning potential or buying a car so that you have transport to your job are times when you can go into debt.
Also, spending less than you earn may not build wealth. How you use your extra money will determine your future wealth. For instance, putting your extra money into a savings account instead of investing in markets will do little to create substantial wealth.
Living within your means may require you to use good debt wisely so that you can get ahead.
Watch Your Spending
When it comes to budgeting it requires more than just keeping track of your expenses. You will need to get into the habit of record keeping, checking your debit orders and bank balances as well as querying any fees. You should be strict with your budgeting by shopping around for the best interest rates, query your bank charges, examine your cell phone contract and read the fine print.
If you have a loan, credit card, retail debt or other financial contracts then it helps to know your rights in terms of consumer protection.
Pay Your Bills Ahead of Time
You should get into the habit of paying your bills ahead of time and try to pay more than the minimum amount required. This helps to reduce the principal amount owing sooner as well as the amount of interest you pay over time.
Read A lot
There are so many resources about financial planning that there isn’t an excuse to not educate yourself. You should continuously read about financial planning and personal finance.
Don’t Give in to Your Kids
Even if you can spoil your kids with material possession, you should actually deny your kids wants once in a while. You need to teach your children the value of money and that they are not able to have anything and everything they want.
Make Savings Automatic
You will need to find a balance between having cash readily available for an emergency and long-term investing.
A retirement annuity is a great financial tool, but you can’t put all your money into one and then not have cash readily available for an emergency. Once your emergency fund is built to a suitable level then use those monthly savings for something else like increasing home loan repayments so that you can pay it off quicker or set up a unit trust portfolio.
Review your savings debit orders regularly, especially when you receive a salary increase, bonus or if your life goals change.
Delay Your Gratification
You need to practice delaying gratification because every purchase that you make today is withdrawing from your future financial security. When you are considering a purchase you need to decide between what you want now and what you want in the future. Impulse buying has been made even easier with online shopping, but learn to deny your wants and think before you buy.
Communicate Openly about Finances
You should be open about your finances and speak to your partner and children about money. You need to be open with your financial goals, what you are working towards and your financial plan. You shouldn’t keep financial secrets from your partner and should rather embark on a joint financial plan so you can achieve both of your goals.
These are timeless financial habits that you should make a point of getting into so that you can achieve balanced finances now and a prosperous financial future.