These 5 habits may change your financial life

Every year it’s proven that most New Year’s resolutions are not kept, mainly because most of them are simply aimed to high. While spending less and saving more as well as getting yourself out of debt are all excellent goals, most of these resolutions do little to change our daily financial actions. What were saying is that, in order to actually seeing financial changes in 2014, most people need to change the core financial habits.

With that in mind we put together a list of 5 habits that could very well change your financial life or at least improve it substantially. Enjoy.

Habit 1: Track only 1 Expense

Here’s the thing; most people absolutely hate budgeting or keeping a budget of any kind. Not only is tracking every dime you spend a bit tedious, it is usually unhelpful as knowing where your money is spent doesn’t actually influence your spending decisions. Instead you should make a point to track only 1 expense, or one category, and keep spending in that category under control. Once you can do that, move on to another that might be causing you to break your budget and follow it as well.

Habit 2: Give yourself a monthly audit

Making a habit out of examining your monthly bills is an excellent way to find services or other things that you simply don’t need and get rid of. Like checking the smoke detector in your home, checking your bills on a regular basis is a great way to put out financial fires before they start.

Habit 3: Automate your Savings

For most people one of the hardest habits to develop is simply the habit of saving money. Today however it’s so easy to automate that process and make it habitual that not doing it simply doesn’t make sense. From things like an emergency fund to your 401(k) or IRA and anything else that you want to stash money into, automating it is one of the best ways to do it and can be done simply by talking to someone at your bank or better place of work.

Habit 4: Learn something new financially every day

If you make it a habit to spend half an hour every day reading a book about finances, blogs like ours or other relevant financial information, you’ll find that at the end of the year you are much smarter about all things financial and have a much better grasp of finance fundamentals, something that can help you turn your money into assets that will offer you long-term wealth.

Habit 5: Make sure to track your progress regularly

Simply put, it’s very hard to improve something if you don’t have a way to measure your improvements. The best way to measure your finances is by using a personal balance sheet that lists what you owe and what you own.  Make a commitment to check and update your balance sheet once a month, something that will help you to focus on your financial progress. Using any number of free online tools you can find these days will make it even easier.

The great philosopher Aristotle once said “we are what we repeatedly do. Excellence, then, is not an act, but a habit.” If you get into the habit of checking your finances and making sure that they are on track, you will soon be an excellent financial tracker and find that your finances, and your financial situation, improve every year.

Comments

These 5 habits may change your financial life — 8 Comments

  1. I follow habits 2, 3, and 4 pretty regularly. Habits 2 and 3 are easy to implement and have a large impact on savings. I work on habit 4 because I can always stand to improve and I like learning.

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