I’m hearing everywhere in our Private Facebook Group (you can join here) and from friends and family how fabulous this year is going to be. Maybe it’s something in the air. But one thing I know for sure is you can’t just hope or wish upon a star for a great year.
It takes much more than that to make it happen.
I’m a fan of habits. I learned many years ago to establish practices to accomplish goals and get things done. Without my daily habits, I’d be lost. But I have other routines I’ve developed over the years – everything from how to keep my home clean to managing my finances.
Today I want to focus on 11 money habits that if you embrace this year, you’ll find yourself in an entirely different place financially next year.
11 Money Habits To Embrace This Year
Live On Less Than You Make
If you want to get out of debt, pay off student loans, build your emergency fund, pay off your house quicker save for a vacation or just save in general you must live on less than you make. There really is no way around this habit unless you strike it rich and win the lottery.
Living on less than you make becomes easier to manage when you live on a budget. Why? Because you are intentionally telling your money where you want it to go. You’ve factored in all your expenses and know how much money you wish to use for the purpose of saving or paying off creditors.
The best way to learn to live on less and embrace this habit is to develop a budget or monthly spending plan.
Start Using Cash
Thrifty people who are debt free use cash regularly because they understand that when they use debit or credit cards, they are subconsciously being disconnected from their money. They realize by using plastic in any form, provides the opportunity to lose track of what they’re spending, and they don’t want to do that.
If you want to embrace this habit, start using cash to make your purchases and become reacquainted with money.
Use Self Control
People who are debt-free demonstrate self-control on a regular basis. They don’t go out and frivolously spend money. Instead, they carefully plan all their expenditures no matter what it is. If they want to go on a trip, they budget for it. If they need a new washing machine, the plan for the cost down the road or take the money from their savings to pay for it. They are never reckless with their money.
This habit is best cultivated by working on the issues that get you to spend.
Develop a Budget
How can I say this any clearer? You need a budget. It’s really that simple.
People who are debt-free and do a great job at managing their money know they must live on a budget.
But budgets get a bad rap. It’s like the word diet. Immediately when you think of those two words the next word you think of is restrictive. But it doesn’t have to be like that. A budget is just a tool to tell your money where it’s going to go each month. If you can afford to go out to eat to a nice restaurant once a week with your husband or partner, then go! Just make sure you allocate the funds in your budget.
If you do nothing else this year than embrace this habit, you’ll be off to a great start. Develop your budget and start seeing how much more control you have over your money.
When I was in the throws of financial destruction, I didn’t have a penny to my name. Today my savings account looks very different. Why? Because I saw the value in saving money and adopted the habit and began to save regularly.
This one habit along with creating a budget can transform your financial situation in a very short time.
Not sure how?
First, develop your budget and make sure you allocate something to savings. If your budget doesn’t balance, go back and make cuts where you can reasonably make them. Once it’s adjusted each month, pay yourself first by putting the money you designated to savings into your savings account. Better still have it automatically taken from your checking and put into a saving’s you can’t touch like a Capital One savings account. That’s what I do every month and have done this for years.
Open up a savings account and start saving this year!
Pay Attention To Your Money
A funny thing happens when you start to pay attention to your money. Things get a lot less stressful and a lot more calm. Most people think that if they just ignore bad stuff, it will magically disappear. But we all know from experience this simply is not true.
When we ignore our money, when we fail to open up the bills, don’t look at our checking account regularly, fail to balance our checkbooks and the countless other ways we ignore our finances, we inevitably get ourselves into trouble.
The way to bust out of this chaos is to embrace this habit and start to pay attention to your money.
Have A Long Term Plan
When you set goals and have a plan of action developed, it’s easy to stay on track. When you don’t, well, it’s more difficult because you don’t know where you’re headed. You’re just floundering around, trying to figure it out without a plan of attack.
When I got out of debt, I had a plan. Today, although I don’t have credit card debt any longer, I still have a plan for what I want to accomplish financially. I make every effort to stick to the plan because I know the plan is solid and in my best interest.
What’s your plan for the new year? The best way to embrace this habit is to write it down and review your progress regularly.
Don’t Use Money To Fill Unmet Needs
Feelings of discontent, like envy, jealousy, or unhappiness lead many people to spend well above their means. Learning to live on less also means not using money in ways that fuel this desire to spend money to feel better or worse “to keep up with the Jones.’”
If you’re always preoccupied with what others have that you don’t, and then you fuel that preoccupation with shopping, you’re in a dangerous trap because no amount of stuff is going to rid you of those feelings.
Only through self-reflection and a greater understanding of what might be missing in your life, will you be able to stop using money in this way.
Debt-free people actively look for ways to cut costs and save money. They’re not afraid to call the cable company and seek a better deal. They search for opportunities on an ongoing basis to save where they can. They don’t leave it up to chance.
If you’ve got creditors on your back or you’re trying to cut costs, be proactive this year. Take the bull by the horns and start making calls. Every call you make will help you fast track your progress towards getting out of debt and turning your financial situation around.
Prefer Stress-Free Over Stress-Ful
At some point, all folks who are now debt-free came to their breaking point. They were sick and tired of debt, creditors, the constant phone ringing, the pit in their stomach, the dread, fear and stress associated with debt.
Now, debt-free folk live stress-free lives. They’ve eliminated all of the worry and angst, and now can enjoy life on new terms – terms they established and are comfortable living by.
I know you want this too. By implementing the other habits, you can have a life that is less stressful too.
Cultivate Relationships Over Stuff
When you get rid of all the hassle that debt creates, what’s left is an opportunity to develop and enjoy your relationships.
Stuff is just stuff, and it can never be a replacement for meaningful relationships with others. Debt-free people realize this and work at cultivating stronger ties with the people who matter most to them.
Find new ways to enjoy the people in your life without having to spend large sums of money you don’t have. There are countless ideas on my Pinterest Saving Money board to give you a starting off point.
These 11 money habits are what we know works. So many people who were in debt and are now debt free can attest to the usefulness of these 11 practices.
What’s stopping you from embracing these habits and putting them into practice in your life? If you want help figuring that out, then join us this February for our 28 Days of Spending Zero – The No Spend Challenge. We’ll be diving deep and using the best tools and resources to get at the heart of your money issues. I hope you’ll join us!
MY FAVORITE MONEY-SAVING TOOLS
EBATES: Want to earn cash back when you shop online? Ebates acts as a shopping portal offering coupons and cashback from over 2,000 online stores. I always check on Ebates first whenever I shop online! You can join Ebates for free and get a $10 welcome bonus when you sign up through this link.
DIGIT: Like the idea of saving but need something automatic? Digit is the perfect solution if trying to automate your savings strategy. In essence, what Digit does is use an algorithm to detect spare money and then transfers it to a secure savings account – so you’ll always have something to fall back on. Sign up for free!
GROCERY BUDGET MAKEOVER: Is your grocery budget giving you a serious kick in your families spending plan? Grocery Budget Makeover helped my family slash $6,000 a year from our food bill! Learn more about how Grocery Budget Makeover can help you save money too!