Published On: Fri, Aug 14th, 2020

Want to get smarter with your money? Use these 5 financial habits

Living paycheck to paycheck is a reality for a lot of people. If you can relate, use these five healthy financial habits to break the cycle for good. 

Let’s be honest: living paycheck to paycheck can wear you down financially and emotionally. So, you have all the reasons to want to break the cycle. 

We get it, money comes in, and just as quick, it goes back out again, living you with no money to save or to invest in the things you want. And, your income never seems to stretch as far as you need it to. So, you may be wondering “what can I do to improve my finances?” Use these five healthy financial habits to get smarter at managing your money:

  • Save money

It may seem impossible to save money when you are already struggling with paycheck to paycheck living. Yet, if you try harder, you will eventually succeed to cut down some costs and save the extra money you’ll be left with in your pocket. 

You can, for example, maybe save on your utility bills. Or, once you get better at identifying non-essential expenses, you’ll save the money you’d have otherwise spend on these things you didn’t really need. 

Another great money-saving strategy is to look for the best deals out there if you don’t want to pay more than you should for certain products, especially when you’re shopping online. Certain websites can help you find the Best Choice Product coupons and offers for products online. Using these coupons, you will save a few dollars for every item you purchase. The money you save can go into your savings account for times when you need them. 

Another trick to get the best deals and avoid paying more than you should for the things you buy online is to use a VPN for better deals. Using a VPN when you are shopping online can help you save a few dollars too because you’ll be able to check the prices of specific items in different locations. Many brands offer different prices and deals to people from different parts of the world. So, since a VPN hides your real location, you can purchase items with the lower prices.  

pixabay/Mashiro Momo

  1. Become a budget master 

Budgeting seems complicated, and it isn’t quite the most entertaining thing to do in your free time. Yet, if you want to learn how to manage your finances better, this is the first step you need to take: becoming a budget master. 

So, how do you create a budget? Well, although budgeting may sound complex, it’s as easy as finding a way to track all your money, including your expenses and income. Start by totaling up your income and calculate all your expenses. This way, you can find out how much of your income goes quickly to paying bills, debt, and any other cost related to living. 

Why will budgeting help? Because when you keep track of your money, you are more aware of how you spend them and on what. 

Now, there are also a few tricks to budgeting. For example, some financial advisors recommend using cash only instead of using a credit card. Credit cards are more convenient, yet tricky when it comes to spending because you don’t see the physical money which may make you spend more than you think you are. 

Another pro strategy to budgeting is the 50-30-20 rule where 50% of your income is used for your needs, 30% of it goes to your savings account, and 30% of it you can use for your wants. 

  1. Learn to differentiate essential expenses from non-essential ones 

One of the biggest mistakes that you can do when budgeting is not being able to differentiate essential expenses from non-essential ones. And, that’s how you end up spending a lot of money on things that you don’t really need. 

As the name of the two suggests, while essential expenses are expense related to living, that you absolutely need to pay for, such as rent or mortgage, non-essential expenses are those that you don’t necessarily need but you rather want, including things such as clothes, shoes, or Netflix subscription. 

Now, the trouble is that if you don’t learn to differentiate the two, the non-essential expenses might be blowing your budget. So, it would help if you would learn how to prioritize your expenses based on how important they are. 

  1. Think on the long term 

Do you have any long-term financial plan? Like buying a house or changing your car, for example. If the answer is “Yes”, you need to rethink your money management strategies to work with what you want to accomplish financially in the long-term. In other words, if you want to save for a house, think of a strategy that will help you save enough money every month to achieve your goal. 

Yet, even if you don’t have a clear financial goal in your mind, it is still a better idea to think in the long term. For example, even if you don’t necessarily need anything right now, you never know when that might change. You may need the money to invest in a business idea or even have to pay for an emergency. Either way, it doesn’t hurt to see beyond today, financially speaking, and save money or invest for the future.  

  1. Read finance books 

You don’t need a diploma in Finance to be able to create a budget and manage your money the smart way. But, learning more about finances can definitely help.

One thing that perhaps all wealthy people around the world have in common is financial literacy. They have the knowledge about how to become wealthier. So, you should implement the habit of learning finance too. Finance books will teach you everything about managing your money more smartly from budgeting strategies to money-saving tips and investment strategies. 

Author: Stephen Marshall

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