There are financial habits that all wealthy people have in common. Do you do any of these?
When you look at people who are financially fit, they all have several things in common. They know the value of money and have developed plans and habits which keep them in shape (financially speaking, of course). These people are never late with their bills. They know the value of money. When it comes to debt, they have little to none.
These are their habits. These are the common threads which bind them together. When it comes to money and finances, they know what to do — and what not to do. They may not have thousands of dollars in the bank, but they are still financially fit. The way they handle their money is magical to may of us.
The truth is that it is not magic. There is no secret formula that they follow. They have one thing in common.
Good financial habits.
Anyone can do this. You just need to know where to start. Below, you will find ten habits that these people all have in common. Best of all, they are things you can start doing today.
Financial Habits You Must Start
1. Have a written budget
This is key to any financial plan. Many people have a budget…sort of. They know who they have to pay each month. However, they do not have it in writing.
When you have a written budget, you see exactly where your money goes. Best of all, you can direct your money to tell it where you want to go. You get to decide what you want to save and how much you will spend on groceries.
Make sure you include every. single. expense. Don’t forget about that coffee you grab on the way to work or the money you spend on parking every day.
Your budget is your roadmap to financial success.
Read More: How to Create a Real Life Workable Budget
2. Pay your bills on time
One of the best financial habits to start is to never pay your bills late. There are so many ways to ensure they are paid on time. Take the time to set up automatic payments with your creditors. Set up alerts on your phone. Use your calendar and pencil in the due dates. Make sure you keep your bills organized so you never forget to pay them.
When you pay your bills on time, you show you are responsible. Not only that, you never have to worry about late fees being attached to the amount you owe.
Read More: How to Organize Your Bills
3. Need for immediate satisfaction
It can be tempting when you are shopping to pick up that new bag or those shoes. However, do you need them? Will buying them truly make you happy? Why do you feel you want to buy them?
Asking yourself these questions can help you avoid emotional purchases, which do not lead to anything but possible buyer’s guilt.
If you do want to buy something, use the 24 hour rule. Go home. Think about it. Check the budget. If, 24 hours later you still really want it and can afford it, go ahead and spend the money.
4. Put away the plastic
Cash is one of the best ways to ensure you are financially fit. Even if you use credit cards in the right way and pay them off every month, you may still be overspending.
For instance, if you have only $100 to spend on groceries, you can’t spend $101 if you use cash. However, if you are using plastic, you can. It is just far too easy to spend more than you anticipated. Using the envelope method of spending can really help you stay on track.
Sticking with cash will ensure you never spend more than you have budgeted because it is impossible to do.
5. Keep the lines of communication open
My husband and I have regular budget meetings. We look over our finances. We check our spending. It helps us both know where we are at financially at all times.
You need communication in all areas of your relationship – including finances. Never hide money or spending as that can lead to nothing but anger and fighting. Just be honest.
Make time for at least a monthly meeting. If you need to, add it to both of your schedules so that you can go over it together.
6. Pay down debt
There is no such thing as good debt. Take the steps to pay off your debts. You will need to create a debt pay off plan to make it happen. It may take some time, but you can do it.
Read More: How to Get Out of Debt The Right Way
7. Save money every month
This is one of the financial habits it seems people overlook. You budget should include a line item for every penny you earn — including savings! Saving may be for emergencies, retirement, holidays, etc. There is never a right or wrong thing to save for.
The best trick that you can use to save is to make sure you automate your savings. When it is automatic, there is never an excuse that you can’t afford to save. It is just money that is not available for you to spend.
Read More: The Six Accounts Your Family Must Have
8. Live within your means
Who wouldn’t love a huge house and fancy new car? What about the latest electronics and gadget on the market? Many of us would love that. However, the question is – can you afford it?
We all have different incomes. That means the way we live will be different. While one may make enough to afford the 2,500 sq ft home, another will be happy with an 800 sq ft apartment.
The difference is not in how much you make, but that you spend only what you make. If you can’t afford the bigger home, then you should not buy it.
9. Use credit wisely
Many people want to use credit rather than cash (as mentioned above). Credit cards can be a great way to not only build your credit, but to also get rewards and perks. However, you need to use them the right way.
Never charge more than what you have available in the bank. If you only have $500 in your account, do not spend more than that. The reason is that payday is never a guarantee. Sure, a company owes you money, but if they go under and can’t afford payroll, where will you get your money from? No one. You should be able to pay your entire balance in full each month (on time too, I might add).
Make sure you know your credit score and take steps to ensure your credit report is accurate.
10. Balance your accounts regularly
While you can use online banking to check your account, you should never rely upon this balance. There may be transactions which have not yet posted, online bills paid which are not reflected and even checks you have written which have not yet cleared. By balancing your account regularly, you know what you actually have to spend.
These 10 habits will get you set up on the road to being financially fit. You don’t have start out by doing all ten. Find the one or two you know you can start doing today and then slowly add in the other eight. Before you know it, you’ll be on the road to financial health.