Ever feel like your paycheck isn’t stretching as far as it should be? Maybe you think you’re drowning in debt despite making monthly payments. Whatever the situation, there is a way out.
Good financial habits pay off in the later years of your life. They set the building blocks for financial freedom, when you have enough savings, investments, and cash on hand to afford the lifestyle you want for yourself and your family.
Not sure where to begin? We’ve got you covered. Here are three financial habits that go a long way:
1. Create a Budget and Stick To It
Budgeting is an underrated skill. Think of it as a tool that gives you control over your finances and in-depth information. The best part? It is super easy to do.
Start by tracking all of your income sources. This includes your salary, freelance payments, or investment returns. Then, make a list of all monthly expenses, including living, utilities, transportation, and childcare. Allocate a specific amount to each of your expenses. You can also automate payments to monthly bills and savings accounts.
Experts recommend using a universally recognized budgeting technique, such as the 50/30/20 rule. It simply means allocating 50% of your monthly income to needs, 30% to wants, and 20% to savings and debt.
Remember, budgeting isn’t about restriction. It is a way to prioritize your spending so you can plan for long-term financial goals.
2. Constant Learning
Financial literacy lays down the building blocks for financial independence. It is a set of skills that helps you make informed financial decisions, leading to long-term stability.
Start by setting learning goals. For instance, participate in the 2026 Financial Wellness Month by taking a personal finance class. You can also leverage hundreds of free resources.
According to a survey by Intuit, only about half of adults are financially literate. This is an alarming gap and calls for better financial wellness. Some of the best financial literacy courses cover topics like budgeting, investing, and debt management. Empower yourself and make financial decisions.
3. Embrace Mindful Spending
While it’s tempting to buy a Spanish latte every day on your way to work, the long-term consequences aren’t worth dealing with. Mindful spending can save you thousands of dollars over the course of years. Here are some tips you can follow to prevent impulse spending:
- Put yourself on a waiting period. Wait at least 24 hours before buying an item that seems unnecessary. After 24 hours, if you still want the item, buy it. Otherwise, that’s one less expense.
- Use credit cards as little as possible. Use cash for specific purchases. Avoid saving your credit card information on the web.
- Review your monthly subscriptions every month. Cancel those entertainment subscriptions you no longer use.
- Identify your triggers. This could be stress or boredom. If you feel a sudden urge to spend, take a walk or talk to a friend. The aim is to get rid of that spontaneous and fleeting emotion..
Cutting down spending is hard, but little efforts go a long way.