5 Success Habits to be Financially Free
There are so many things that can hinder you from achieving your financial goals. Bad habits, limiting beliefs and excessive spending are just few things that can get in the way and eventually leading you to become broke in the end.
That’s why when it comes to securing your financial future, good habits are important.
Here are the five smart money habits of people who make the most of their income:
1. Creating a budget
Knowing how much money you have coming in and going out is one of the most important factors when it comes to living within your means. Creating a budget so you know how much you’re spending and saving is key to staying in control of your finances.
When you create a budget, you can make informed decisions about the important things in life and whether or not you can truly afford something or not. Crossing your fingers and hoping for the best is risky business and can easily turn into trouble down the track.
2. Use credit cards wisely
Relying on credit cards and paying high interest rates is not living within your means. It’s not enough to just pay off your minimum repayment – you’ll eventually hit your limit and still be paying all that interest.
If you can’t pay off your credit card in full on a monthly basis, you are living beyond your means. Budget to pay off your debts and make some changes. Save up or sell something you don’t need any more and remember good things come to those who wait.
3. Keep an emergency fund
An emergency fund for emergencies and only emergencies will help you stay away from credit cards and other bad credit scenarios when something unexpected happens and you need cash fast.
When an unexpected sum of money comes your way, whether a gift or a bonus, put it in your emergency fund instead of spending it on something fleeting until you’ve got a good three months or so of living expenses saved up.
4. Set savings goals
Living within your means doesn’t have to mean going without. Being realistic about your financial situation is a great motivator. Picking up an extra shift or working a second job for a period of time is easier when you know you’re doing it for something important.
Likewise, making a big change such as renting a smaller home further out of the city might not seem so bad when you know you only need to do it for a few years in order to save enough money for a car or home deposit.
5. Remember what is important
It’s easy to get caught up in the rat race and the quest for promotions, bigger salaries, better houses and luxury cars. Just don’t let your quest for success consume you. If it all feels like it’s getting too much, it’s time to step back, take a break and remember what is truly important in life.
Money can’t buy you happiness. Do whatever you need to get some perspective, surround yourself with people you love and trust, and set some achievable goals. There will always be people who are better and worse off than you. Comparing yourself to the Jones’s is a path to no place good. Instead, learn to find happiness from things other than material possessions.