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Change your habits to change your financial outlook

Most people don’t intend to be in a poor financial situation, it usually is a combination of misfortune and poor financial habits that lead them towards financial distress. There are a few behaviors that can be the foundation for a better financial outlook and mastering the basics will pay dividends your entire life.
What would you consider to be a foundational money skill?
Without question, it is not spending more than we earn or have. During the holidays this can be very difficult, especially if we don’t have that habit outside of the holidays. No one can sustain spending more than they earn for any length of time.
Is there another habit that is closely related to this?
Yes knowing where your money is going. Too often people spend more than they earn because they don’t know where their money is going. We all have fixed expenses – housing, transportation, utilities – and discretionary expenses – food, clothing, entertainment. This lack of knowledge can lead to poor decisions in either of these two expense categories.
What is another behavior modification that is important?
Learning to be a comparison shopper and during the holidays this is a great skill to put into practice. Not only is it finding the best price but also having an idea of what you want to purchase and the amount you want to spend on gifts. This also helps avoid impulse buys which can be hugely detrimental to your financial situation.
Does someone’s perception of societal norms impact their financial situation?
Unfortunately, it can have a major impact. Keeping up with the “Jones” can often lead to making poor decisions especially in the areas of housing and cars. Also, it can lead to taking more lavish vacations or making other purchases that don’t really reflect a person’s true financial situation.
What is an easy habit that can be started?
Using discounts and rewards. Finding a coupon to use at the grocery store or when shopping online is really very easy and using loyalty cards that offer discounts is another very easy habit to start.  All of these offer significant financial rewards
What is a financial habit that signals one has turned the corner?
Saving for major expenses instead of using credit is one habit that indicates you have mastered the foundation habits.  Without them, you wouldn’t be able to save money for major expenses. And once you save instead of borrow, it gets even easier to save for the next purchase.
Is there one action that can help improve one’s chances of changing their financial habits?
Yes, creating and living a realistic budget.  It is the most important tool that can help anyone develop the proper financial habits needed to be successful.

Posted: 12/15/2017 with 0 comments

Categories: Budgeting, Financial, Money, Money Matters, Planning, Saving, Spending

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