Having stable finances is a dream of every individual. Not worrying about the future with regards to emergencies and other unexpected expenses seem like the perfect life. It’s attainable albeit requires a lot of discipline and commitment to developing life-changing financial habits.
Getting stuck in a debt cycle and not having your finances under control can greatly affect not only your day-to-day living expenses but also your emotional and psychological state. Money can be a root of several issues—the primary reason why it’s important to get a clear view of your finances and get it in order.
How do you do so? Take a thing or two from these habits of financially stable people and help yourself become the same.
- They track their expenses
Before they begin paying off their debt one by one, they start listing down their monthly source of income and fixed expenses to monitor where their money goes and how much they have spent; or have left to save or spend.
To start with, list down your fixed expenses (utilities, bills payments, internet and phone, gas, grocery, etc.). Maintain this list and find where you’re running deficient and whether or not this spending is efficient. Getting a clear grasp of where your money goes and how much is left will make you understand your finance system and alter any if needed.
- They pay off and avoid debt
The major cause of financial instability is debt—and getting frowned in it. Applying and taking out loans, whether it be a cash advance, payday loan, car loan, or the likes, builds up high-interest rates you will likely have difficulty to afford to pay back.
If you’re running short, think of other options other than borrowing money. As much as possible, try to avoid and eliminate debt. Have a plan to conquer your outstanding debts. Pay off more than the minimum amount monthly to lift the weight off your shoulders faster; this goes the same for your credit card debt as well.
- They don’t spend impulsively
A common problem many people face, especially the spenders, is impulse purchasing. What does this mean and how to know if you qualify as a ‘spender’? Do you dine out frequently? See the latest movies on the big screen often? Get easily attracted to flash sales and the likes? If you nodded at these questions and seem to save little to nothing because of this, not-so-congratulations! You’re a spender who usually acts on impulse! Avoid it, prevent it. Leave your credit cards at home if needed to avert any further money damage.
- They save up
People who are financially stable knows what to prioritize. That is, to save more and spend less. Don’t surrender your bank account on the latest smartphones and other trends. These trends come and go, your money spent on these things won’t come back.
Know your needs vs. wants to avoid overspending and having the ability to save more, while still managing to cover your fixed monthly expenses.
- They pay bills on time
You’d likely shell off a lot more due to late fees if you skip your due date on bills. So why not pay it on time as soon as your bill comes?
To make things easier, make all your bills payment automated to pay up on time. This way you’ll avoid late fees and impulsively spend the money reserved for these fees on unnecessary spending.
- They invest smartly
Saving won’t be enough to secure your future and cover for unexpected emergencies. Financially stable people knows how important investing is in securing their future, you should, too. Inquire and talk to financial advisors regarding which investment is fit for you.
- They have a budget system
Do you budget your income? If not, start creating a system you can follow and monitor to ensure your money goes where it should be, see how much you save monthly, and how much extra you have to spend for leisure and entertainment. Yes, folks, financially stable people reward themselves for their hard work and good money habits. Treat yourself!
- They eliminate bad habits
This is the most important and hardest part for some people—overcoming bad money habits. This takes a lot of commitment and discipline.
This means giving up your Friday tequilas and frequent dinner and wine out with friends and families. Trade fancy dinner with your significant other with home movie viewing and Chinese takeouts, of course, with moderation. Happiness shouldn’t come with hefty price tags, find the simple joys in life and make the most out of what you have; don’t go after what you don’t especially if you don’t need it.
- They have a financial plan
Financial stability means having a plan and sticking to it. Once you have a budget system, track your progress, and curate your goals and plan for the future. Make sure it suits your needs and remain disciplined throughout the process.
Any good financial tips you want to share? Leave your thoughts below!
About Chie Suarez
Chie Suarez has spent time figuring out ways on saving money and stepping away from her go-to retail stores. She then became a writer for Speedy Money which offers hassle-free loans services