You will learn about thirteen healthy money habits to help you kickstart your financial turnaround. These habits are the immutable foundation of financial health.
You’re working hard, yet you’re not making progress. Every payday feels like a fresh breath until the bills, the debts, the unexpected expenses – come knocking, and it’s back to square one.
I understand. I experienced the exhilaration of the ups and the sinking feeling of the steep dives while riding the money rollercoaster.
You’re not alone. Many in the UK – 34% of the UK’s employees – are one payday away from homelessness (and have less than £500 saved). The latest studies show that approximately 70% of the UK’s working population report being ‘chronically broke’.
Such levels of financial insecurity are highly stressful and will damage your health, relationships, and quality of life.
You can blame the economy. You can rage against the government and wealthy oligarchs and curse the hand destiny dealt you.
You may feel better for a minute or two, but ultimately this is not helping turn around your financial situation.
Developing healthy money habits will put you in control.
Sounds great, right?
Turning around your financial situation by developing healthy money habits is not a pipe dream.
Stick around, and you will learn these habits and how to develop them.
Are you ready to jump off the hamster wheel and make strides towards financial freedom?
Let’s start!
13 Healthy Money Habits to Turnaround Your Financial Situation
Previously I shared the money habits you must ditch to stop living hand to mouth. Today, I will share the money habits that will help you achieve financial health and transform your financial situation.
#1. Create a Budget and Stick to It
Boring, right?
Wrong! Budgeting is about mapping your financial journey and ensuring you get where you wish to be.
Start by jotting down your income and expenses. See where your money’s going and spot the leaks. Be realistic and include all expenses, even those cheeky little ones.
Making budgeting into a habit doesn’t have to be an uphill battle, but it needs consistency.
Review and adjust your budget monthly because a good budget is like a comfortable shoe – it changes to accommodate your life.
There are a bunch of user-friendly apps out there to help. Remember, your budget is a living, breathing thing. Nurture it, and it’ll guide you to financial fitness.
#2. Avoid Unnecessary Debt
Photo by Markus Winkler on Unsplash
Easier said than done, right?
It’s about developing discernment. Not all debt is bad, but unplanned, unnecessary consumer debt?
That’s a quicksand you don’t want to step into – trust me, I know.
How to dodge it? Enter budgeting. Don’t buy it on credit if it’s not in the budget.
Creating this habit involves cultivating discipline and patience. Resist instant gratification, and remember, if you can’t pay for it now, it’s probably not a good idea to buy it on borrowed money.
#3. Build a Freedom Fund
Sounds cool, right?
Picture this. It’s a rainy Tuesday, and you’ve been handed a red notice. Do you panic?
Not if you have a freedom fund, you don’t. This fund is like your personal bodyguard, standing firm between you and life’s financial curveballs. It gives you the freedom to breathe, reassess and rebuild.
#4. Automate Your Savings
Out of sight and mind, and right into your savings account!
Automation is the secret to consistent saving. Like a quiet, reliable friend, it keeps putting money aside while you’re busy elsewhere.
Be mindful – automate your savings and investments but never automate your spending.
#5. Pay Yourself First
Photo by Sasun Bughdaryan on Unsplash
Why should bill collectors and taxmen get the first slice of your wage?
Remember, you’re the one putting in the hard work. Set aside a portion for yourself before anything else. That’s not selfish; that’s self-care.
(You can automate a proportion of your income to go into savings every payday.)
#6. Avoid Impulsive Purchases
We’ve all been victims of those sneaky, end-of-aisle deals. After all, we are encouraged to be consumers at every turn. And our power to resist battles with an army of marketing and sales experts messing with the blind spots of our brains.
Impulsive buys are like gremlins. They seem harmless but can wreak havoc on your financial health.
Resist.
#7. Use Credit Cards Responsibly
A credit card isn’t a villain but can cause considerable damage in the wrong hands.
It’s a tool; like any tool, it’s all about how you use it. Managed well, it can light up your credit score; handled recklessly, it can burn down your financial stability.
Pay your credit cards in full every month. Make it a habit, or better yet – automate payment.
#8. Track Your Expenses
Yes, even the tiny ones!
They’re the silent ninjas of your financial world, stealthily chipping away at your wealth. Write them down, use an app, and keep an eye on where your money’s going.
Make a habit of reviewing your expenses every week. This will help you make informed decisions about optimising your spending.
#9. Cook at Home Instead of Eating Out
Picture by M. Nedeva
Not a culinary genius?
Neither was I. Then, I realised that cooking is a science: you find a recipe, follow it like the gospel and 98% of the time, you’d end up with a delicious meal.
Even a simple home-cooked meal can save you a pretty penny.
Preparing nutritious meals with no excess salt and sugar is a bonus.
#10. Avoid Lifestyle Inflation
Got a raise? Awesome!
But don’t let your expenses rise with it.
Instead, put that extra money to work, and watch your wealth grow.
#11. Plan Your Shopping Trips to Avoid Impulse Purchases
Remember, stores are designed to make you spend, but with a plan, you’re the one in control.
It’s like going into battle with a strategy, turning from a potential victim into a savvy shopper.
#12. Avoid Financial Scams and Fraud
These scams can rob you of your hard-earned money like wolves in sheep’s clothing. Stay informed, stay sceptical.
Knowledge is your shield in the world of finance.
#13. Educate Yourself on Personal Finance
Think of it as giving your financial literacy muscles a good workout.
The more you learn, the stronger you get and make better decisions. And who doesn’t like the sound of that?
Are You Ready to Turn the Page on Financial Trouble with These Healthy Money Habits?
You’ve made it this far, and that is already a victory.
It is not easy to develop healthy money habits. But remember, even the longest journey begins with a single step, and you’ve already taken that step.
Don’t try to change it all at once. Select one money habit that appeals and implement it.
Each habit, each change you make, is a brick in the fortress of financial stability you’re building.
You’re ready. You’re capable. Now, let’s make it happen!
Photo by Karl Abuid on Unsplash