Financial stability does not come without intentional practice. If it’s time to get a better handle on the state of your finances, start with these 4 habits
It’s the beginning of a new decade; a time to welcome refreshing routines, motivation, and the exciting potential to make this year one of our best yet. Unfortunately, a downside to setting lofty goals for the new year is that we struggle to follow through when the initial excitement fades in the coming weeks. Studies predict that a majority of people who set resolutions will actually give up on them by the end of January… less than one month in! This failure ends up causing stress, regret, and little motivation to pick it back up and try again.
As you might have guessed, saving money, or improving the overall state of your finances, is one of the most popular New Year’s resolutions (along with exercising more and eating healthier). That is understandable given that many of us don’t take into consideration the added anxiety and pressure that our finances have on our daily decisions and way of life. If you can relate to this, consider welcoming this new year with more sustainable habits that you can stick to and build upon throughout the course of the year.
4 Sustainable Habits For Improving Your Financial Picture This Year
Develop and Stick to Routine
If you’re looking to achieve a new goal, especially something like creating a savings account or building a retirement fund, you need a plan to get you going and keep you on track. A great way to do this is by designing a routine that fits into your life and is simple to follow. Routines are easy to build but also easy to break if they don’t work or they’re not convenient. To avoid this, take into consideration the things you like to do every day and factor these into your new habit.
Action To Try:
Schedule a new habit before an enjoyable activity that you do regularly. For example, if you like to read or watch tv before bed, first schedule a 5-10-minute review of your bank account status and weekly purchases. If you prefer reviewing your account status via your mobile devices, sign up for an online mobile banking account. Mobile banking is convenient and a good way to keep track of your finances at all times.
Spend Less Than You Earn
Forming a new habit begins with changing your mindset and mental approach to this new challenge.
We live in a society where we tend to always want more and are rarely satisfied with what we already have. This can create a lot of pressure around spending and making money to pay for the latest technology, grand homes, a flexible working schedule — all while still being able to participate in every possible social invitation. The reality is, for most of us, this way of life is neither affordable nor sustainable.
Action To Try:
Do something good for your wallet by learning to differentiate your wants and needs and then prioritizing what is important to you. Feel free to regularly reevaluate and redefine your priority list as your life circumstances alter and develop over time. Once you realize what your required expenses are and put any leftover money towards activities you want to participate in, you will have less guilt, more happiness, and more opportunities to save money for things that are actually on your priority list that month.
Plan for Large Purchases
It’s common to feel stressed or nervous prior to making a large purchase. This is due to the fact that there is often a lot of time and research put into these purchases that are often difficult, or at least inconvenient, to return. Since stress can lead to rash financial-related decisions not in your best interest, take time to plan out your big purchases to make sure they fit in your budget and align with your monthly goals.
Action To Try:
Make a list of some of the major purchases you want or need to make for the month. Next, create a priority list by numbering each thing from most to least important. Although a new bed sounds like a great investment since you’re sure you’ll have it for years to come, you might have to prioritize fixing your bathroom shower this month instead. Place this list on your refrigerator or copy it down in your agenda to further motivate you to save up for your next big purchase.
Focus on Small Wins
If you’re feeling overwhelmed by the financial goals you’ve set for yourself, or you find yourself avoiding spending money and pinching every penny because you fear that you might not reach your goals, it might be time to revisit your approach to goal setting.
The habits you’re building should be sustainable while still allowing you to do the things you love without feeling guilty.
To achieve this, set a few goals you will actually be able to master. If that seems to easy, then go ahead and challenge yourself more if you feel it’s appropriate.
Action To Try:
Commit to setting a certain amount of money aside each month to be used toward a major purchase, a vacation, a renovation, a celebration, or any of your goals that require additional funding. This is an easy and inspirational way to see your savings grow. It is also a great overall budgeting practice that will teach you discipline. After you get used to this practice, it will start to feel easier. It will also help you to build your financial confidence once you see your intentions being put into action.
You may also enjoy reading Money vs. Wealth: 5 Tenets for Creating True Prosperity by Moira Bramley