Seven Steps To Improve Your Money Habits
Does any of the following apply to you?
* You'd like to get your money under control.
* Want to be more financially aware
* Just getting by from day to day.
* Not be able to afford the things you need.
* Up to your limit on your credit cards.
Well, I'd like to share with you some of the money habits I've adopted over the years that have enabled me to keep my finances under control, invest for my future and almost without realising it, reach a comfortable state of financial freedom.
The Seven-Step Approach
If you follow the steps outlined below, you will significantly improve your money habits and increase your financial well-being. You will be less stressed and therefore improve your physical and emotional well-being too.
Learn how to take control of your finances and get a clear understanding of where you are financially.
* Step 1 - What Are Your Money Habits? What money habits do you currently have? What is your spending pattern? Take stock of where you are now and you will start to understand what being in control means to you.
How does money or the lack of it affect your life? It's your decision as to how you spend your money. If you are spending more than you earn - you have a choice, carry on and get into debt or stop. Spend money for short-term gain and gratification or spend your money on longer-term financial stability and for your future goals. Every time you're tempted to spend money on a new pair of shoes, a meal out or a new outfit - think! How much more could that money be worth to you in the longer-term?
* Step 2 - What Does Money Mean To You? What's stopping you from being financially free? Understand where your beliefs and money behaviours come from, so that you can address the underlying reasons for your bad habits and start to put in place some new ones.
You probably have some beliefs about money you hold today that developed through your childhood as you grew up. Beliefs based around what your parents, society and religion taught you about money. The way your parents dealt with money will affect the way you deal with your money.
* Step 3 - Get Organised! Develop a crisp, clear picture of your expenses and your income. Do this and you'll be in better shape and have a clear picture of where you are.
The reason this is important is to work out whether you're earning enough to meet your expenses. If not, you either need to a) cut your expenses or b) you need to earn more money. The reason people get into debt or overspend is because they are unaware of how much they actually need to earn.
Gather together all your salary slips, receipts, bank statements, credit card statements, details of loan payments, mortgage, your money diary, etc. Work out all your incomings and outgoings.
* Step 4 - Reduce Your Outgoings. Look after the pennies, and the pounds will look after themselves. Begin to look at ways you can reduce your outgoings and start saving.
Even if you're getting by, you may be surprised at where your money goes and how much you could save with a little effort and some careful thought. Look at the items that cost you the most and see what you can do to reduce these first.
* Step 5 - Dealing With Debt - neither a borrower nor a debtor be. There's no escaping the fact that we live in a consumer society where possessions sometimes seem to be everything. This can lead us to accumulate things we don't actually need and run up debts we can't afford. Credit is just another form of debt. It may seem like an easy solution, 'Buy Now, Pay Later' but how much do you really end up paying for that short-term pleasure?
If you're in debt, then get clear on what your debts are. How many debts do you have? How much is your debt actually costing you? Decide that today is the day you're going to take responsibility and you put yourself in a much better position to do something about it. You're not the first and certainly not the last person to be in debt. As soon as you start to bust your debt you'll become more financially free.
* Step 6 - Savings - speculate to accumulate. First create your Emergency Fund and then start saving and investing for the long term. Even if you don't have enough money to invest you can at least start saving. Set up an automatic payment straight out of your account into a savings account.
Place it somewhere with easy access, preferably earning the highest rate of interest available. Never under the mattress! Keep 10% of your savings readily accessible for emergencies. As you build up your savings fund - move it into a high-interest, long-term savings scheme. Make your money work for you!
Your first savings pot should be your Emergency Fund. Aim to accumulate 3-6 months of your basic monthly outgoings that you need to survive. Should the worst happen and you lose your job, go sick for a period of time or decide to have a change of career, you will have a financial cushion to support you.
* Step 7 - Moving On - Good Habits. Keep yourself on track with some new money habits.
- Get organised and put a structure in place to keep you financially in control.
- Get all your regular, monthly expenses on direct debit - that way you won't have to remember to pay bills, miss a payment, get unnecessary charges or risk getting cut off.
- Check how much you are paying for things on a regular basis. Check your bank statement every month when it comes in.
- Set aside a little time, every day, once a week or once a month to organise your finances.
If you follow these seven steps you should start to feel more in control of your money and be in a far better position financially. By reducing your outgoings you will be able to start saving and investing in your future. Money is the means to an end - it is not the be all and end all.
"...if you have food in the refrigerator, clothes on your back, a roof overhead, a place to sleep, money in the bank, in your wallet, and spare change in a dish somewhere... you are richer than 75% of this world."
Related Tags: savings, debt reduction, money management, money habits
Clare writes on several topics to help busy, stressed individuals and small business owners organise their lives more effectively.Receive free weekly Time Tips to show you how to manage your time more effectively when you register for her monthly newsletter at www.clareevans.co.uk.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are