Change Your Life This 2019 by Following These 40 Financial Habits

Each of us have different financial situations. Some have enough money to live their life according to how they want it. Others maybe living just enough for their daily needs. And there are those who are barely making a living. Whatever is your financial status, there will always be room for improvement. Below are 40 habits you can use to improve yours.

  • Know your purpose in life

A lot of you are living life without knowing their purpose. They work to earn money but not really knowing what they want to achieve in life. They feel feel easily exhausted and unmotivated. This will result to a lack of financial outlook.

To find your purpose in life, ask yourself the following questions and answer as honest as possible:

  • What makes you happy?
  • What achievements, whether small or big, are you most proud of yourself?
  • What are the things, activities you want to do/to try but you keep on holding back?
  • How do you see yourself 10-15 years from now?

Having a purpose to live is the ultimate foundation of a good financial life because this will motivate you to improve your financial life.

Create a budget.

Having a budget is an essential start to financial planning. There is no fix budget you can follow. Each person has a different need base on what they need and their location of residence.

Track your spending.

Tracking your expenses is as important as having a budget. There are some people who earns a decent amount of money but still feels that they need to earn more to be able to spend more. But when you ask them what are they spending there money on, they won’t be able to answer. Tracking your expenses is a good way to know if you are living within your means. There are a lot of tracking tools you can use depending on what you feel is more compatible to you. You can use a good old fashioned notebook and pen, or a mobile app. Just make sure you record every financial transaction you do everyday, no matter how small it is.

Develop a spending plan.

A spending plan is simply a schedule on when you need to spend versus when you are getting paid. There are fix expenses that needs to be paid at a certain time to avoid penalties. Create a calendar for all the due dates of your expenses and how much it would cost to properly allocate your income.

Stop living paycheck to paycheck.

Do you constantly find yourself worrying how to make ends meet? Do you always run out of money even before the month ends? Living paycheck to paycheck is a real phenomenon and everyone have found themselves in that difficult situation before. Break the cycle. Cut back on unnecessary expenses. Save first, spend later.

Take charge of your debt.

Having a debt is a stressful matter to think about. It will keep you bothered thinking of ways to pay them off. Taking charge of your debt will enable you to have positive finances once and for all. If you have huge amount of debt that entails a lot of interest and penalties, prioritize paying for them. Instead of saving, pay all of your debt first.

Always pay with cash.

Pay with cash so you’ll know exactly what’s coming out of your wallet. Every time you pay cash, you will be more conscious on the amount your spending. This will also help you reflect whether you really need what you’re buying or not.

Build an emergency fund.

Emergency fund is a cash buffer for emergency situations. This should be your first priority once you start earning money. Once you have build up for your emergency fund, you can start saving for other goals. As a guide, emergency fund is at least six times your current salary or cost of living whichever is higher.

Have a retirement fund.

If you are employed, or at least contributing for SSS or GSIS, you will get a pension after retirement from the government. Some are lucky enough to receive a pension to make a comfortable lifestyle. But for most, that isn’t always the case. Because of inflation, the money you are set to receive 20-30 years from now will not be enough.

Starting a retirement fund can be done through savings, investments, or through a Personal Equity Retirement Account. With this, you don’t have to worry about life after retirement.

Write down your goals.

After saving for an emergency and retirement fund, you might feel there is not much left to do. Of course not! For one to fully live their lives, they would want to achieve certain goals in life. This may be as simple as travelling to your dream destination or as big as buying your dream home. Whatever those are, write those down and start working for it. This will help you visualize your goals and at the same time, inspire you to work and save for it.

Get a side hustle.

You should not settle in having one source of income. For most people, they work for 8 hours a day, 6 days a week. There are a lot of time available for a side hustle to get additional income. If you have skills in baking or crafts, you can sell it to your friends or online. You can also write a blog or apply for an online part time job. For those of you who has enough money to spare, you can invest in stocks or other means of investment to increase your monthly income.

Live below your means.

When you budget, you always start with how much you are currently earning, and work your way to how much you can spend. This basically equates to living within your means. It is important to know what kind of lifestyle your income can support so you won’t incur unnecessary debts.

Follow the golden formula: Income – Savings = Expenses

When you receive your paycheck, make sure to allocate a certain amount for your savings first before spending. It is recommended to have a separate savings account so you won’t be tempted to spend it. Every payday, transfer a fix amount to your savings, and then investments. Whatever is left should be your working budget for your living expenses.

Invest now!

As soon as you can, start investing. There are a number of guides online that can help you decide which would be ideal for you. Even with just an allowance, you can start your investments. This will surely bump your financial status to a better one.

Diversify your investments.

Never put all your eggs in one basket. When investing, make sure to be diversified as possible. You can invest some of your money in stocks, some in mutual funds. When doing stocks, invest in multiple companies rather than concentration in one. It is also better to invest in different types of industries, like food, real estate and telecommunication.

Live a frugal life.

Frugal living is all about being careful on how we spend our money. It is finding happiness in spending less than what one will normally spend.

There are plenty of ways to live frugally. You can pack your own lunch instead of eating out. Purchase second hand items or look out for sale. Cancel any monthly subscription you don’t really need. If you must eat out, choose service water instead of ordering a beverage.

Save automatically.

The most efficient way to save is to do it automatically. You can do a recurring transfer every payday from your payroll account to your savings account. Most banks offer this kind of services, all you have to do is apply.

Avoid impulse buying.

Impulse buying is one of the worst financial habits and it is very common to everybody. Unplanned purchases are mostly driven by emotions and not by need.

To avoid impulse buying, you can try the following:

  • Create a list before doing grocery shopping.
  • Avoid going to mall after work.
  • If you see something you want to buy, wait for at least 30 days. If you still like to buy them after, then you can purchase it with little guilt.

Avoid debt.

Avoid debt as much as you can. You should limit borrowing money only when in need. Do not borrow or take a loan for expenses that can wait like travels.

Do the envelope setup for your budget.

In order to be able to stick to your budget, do the envelope setup for your budget. Each category of budget is put in an envelope. If the envelope runs out of cash, then you are not allowed to spend for that specific category until your budget starts again. You have to be mindful though of your daily expense or you will end up with no food or transportation budget before your budget cycle is over.

Support your financial knowledge.

Expand your financial knowledge by reading more articles or books about it. Through this, you will learn new ways to improve your financial status.

Avoid any form of vices.

Vices like smoking and drinking can cut a big chunk of your overall cash flow so learn to stop any addictions. Instead of wasting your attention to these, make time for activities that will make you healthier.

Go to the gym, start running, or better yet, use the time and money you will save avoiding your bad vices on making extra income instead.

Go for discounts and free stuff.

You can actually maximize being a consumer by being alert on store sales, using discount coupons or online purchase like flash sales. Try saving money and going on a shopping spree on year-end or month-end sales instead.

Stop impressing others.

Almost everyone has that need to impress others with just about anything. Most of the time, this is a very costly habit. One that can most likely ruin your financial plans. Stop worrying about how others perceive you. As long as you have your basic needs, then you are alright.

Learn to let go.

Try going through your stuff and see if you are actually using all of them. If you find items that you don’t need, sell them online or through garage sale. This way you get rid of the stuff you don’t use and make extra income.

Pay bills on time.

Be organized when it comes to your bills. Know your due date and amount to pay  in advance so you can prepare your budget in advance too. Paying bills on time promotes financial peace and give you a strong foundation on your financial habits in life. You can also automate your bills. Again online or e-banking will be your best friend for this. Automatically pay your bills online instead of going to payment centers for bills like telephone, electricity, mutual fund portfolio, phone plan, etc.

Automating your bill payment will saves you time and effort plus assure that you will pay your bills on time. Paying your bill on time also saves you money on interests and penalties.

Invest on things that appreciate value.

Instead of spending for gadgets or eating out, why not invest your extra money in stocks, properties or other items that appreciate in value? You might find enjoyment in buying things like gadgets but when the time comes that you would want to sell them, you will get less than what you paid for. By using your money to spend on things that will appreciate in value through time, you can expect a higher return of money in the future.

Have a clear outlook on your finances.

Having a clear outlook on your finances is very helpful in achieving your financial goals. Ask yourself the following:

  • Where do I want my money to go?
  • Where don’t I want my money to go?
  • What purchases made you happy?
  • What purchases didn’t make you happy?

Defining your attitude helps you in taking charge of your finances.

Stop wasting money.

There’s a lot of excuses why people spend money on little things that don’t add value to their life. May it be because they feel they deserve a treat, or because they want to hang out with their friends. Doing this occasionally is okay. To avoid wasting your money, do mind over matter. Think about the bigger picture, your goals, your financial plans in life.

Learn to say no.

One of the most common excuses for spending money is social pressure. Your friends want to dine out. Some would need to borrow cash. Or the social pressure of buying gifts on special occasions.

Before agreeing on doing anything that involves money, check first if you have extra money. If you don’t, then learn to say no.

Save early.

Most people don’t think about savings at all. They feel that their income is too low to start saving. That should not be the case. You can start saving the moment you start receiving income. Even on an allowance, you can already save. Allocate a certain percentage of your income to your savings account. You can start with 10% and work your way up. The earlier you start your savings, the more you can save up.

Save base on your salary.

The higher your salary is the bigger your savings should be. As mentioned earlier, it should be a percentage of what you are earning.

Don’t let the additional spending power you have cause you to lose money. Continue saving and living within your means even if you just made a salary increase.

Create your own money principle.

Your view about money shapes your financial wheel for life. Money principle stands as your basis when it comes to how you use and allocate money.

It is a concept that you try to remember, follow and pass to others as it works for the betterment.

Invest in the basics.

If you have to buy for your basic needs like clothing, don’t just go for cheap items. Choose those that will last and will truly serve it’s purpose.

If a P200 shoes will only last you 3 months, why not buy a P500 shoes that will service you for a year?

Master your time.

Successful people are good managers of their time, that is why they are successful. People who often claim they are too busy or don’t have enough time to do something else are often the unsuccessful one. Each of us are given 24 hours a day, 7 days a week. If you are able to manage your time to maximize each hour

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