The four financial habits you should create this year
01/30/2025
We can all improve our financial situation and one of the best ways to ensure this is to build money habits that support this effort. We make financial decisions every day and often we don’t realize that our money habits have a huge impact on whether we make smart choices or choices that can be detrimental to our financial situation.
What is the first habit to build?
One of the most important habits to build is tracking the important numbers in your life. This includes your spending, your savings balances, your debt, or your net worth. The point is that if you want to know where you are financially you must have something that you are measuring. You don’t need to measure everything - just whatever will have the greatest impact on your financial situation.
Is there a habit that can help with controlling spending?
Decide to be purposeful with your spending, especially for non-essential expenses. One of the best ways to accomplish this is to make a plan for all your spending that falls in this category. This includes any major purchases, vacations, and even your monthly entertainment. Plan in advance how much you are going to spend each month and create a budget just for those expenses. It is a great way to control your spending and have the fun you want to have.
How can we make our money go farther?
Another great habit is finding ways to save every day on your expenses. This could be doing more comparison shopping or reviewing expenses that you might take for granted. Another key move is to use the apps from the places that you shop at most frequently. Most coffee shops, whether chain or local, have frequent shopper rewards and those apps make it very easy to save. So, you might not have to reduce what you are doing; you just need to make sure you are paying the lowest price available to you.
Is there one habit everyone should always have?
The one habit that everyone regardless of their financial situation should build is not over-paying for anything they purchase. This could be cancelling unused subscriptions, reviewing insurance costs annually, and always getting more than one quote for services. This also means when making major purchases or even traveling, make sure to comparison shop and find the best value which might not always be the lowest price.