6 Financial Habits to Establish for Long Term Stability
Change your financial situation by changing your lifestyle!
Financial stability, like many long term goals, is more of a journey than a destination. Rather than working toward the end‐point of "being wealthy," it is more effective (not to mention more psychologically rewarding) to focus your efforts on making smart decisions, one day at a time.
In this article we will discuss a few simple habits that anyone can develop in order to manage their money more wisely.
- 1. Make savings automatic. Most direct deposit accounts allow you to split your paycheck in up to four different accounts ‐‐ so if you are paid this way, why not ensure that a portion of your earnings go directly into your savings account each and every pay period?
- 2. Avoid impulse spending. Make a rule that any major expense (for example, more than one hundred dollars) must be decided upon at least one week in advance of the actual purchase. On a similar note, try to avoid hungry grocery shopping and other situations that tempt your natural desire to splurge.
- 3. Evaluate your expenses. If possible, try writing down each and every expense for one month’s time in order to gain a better (though possible painful) understanding of your spending habits.
- 4. Invest in insurance. Not only is car (and, in many circumstances, health) insurance legally mandated ‐‐ it is also a smart financial move. If at all possible, make the commitment to ensure the things that you value most in order to avoid financial ruin in the case of bad luck.
- 5. Eliminate debt. As we have mentioned before on this blog, paying down debt oftentimes offers larger (not to mention safer) per‐dollar returns than investing in the stock market would.
- 6. Automate bill payments. Why risk damaging your credit simply because of a forgetful mistake? Automate as many bill payments as you can to eliminate the all‐too‐common risk of accidental delinquency.
Visit Madison Monroe and Associates online today for more information about earning financial freedom!