We all try to manage our money well. It’s much easier said than done. I think it’s something that will always be a work in progress as we go through different chapters of life. However, there are certain financial habits that I think are key in managing finances well throughout our lives.
First and foremost I think a savings account is a must. You never know what’s going to come up – a car repair, home repair, unexpected bill can show up without notice. It’s always nice to have a cushion to fall back on when something goes wrong.
For example, we had a leak coming in through a pipe on our roof. It wasn’t covered under the home warranty so we had to pay the entire cost out of pocket. Thankfully, we had some extra cash set aside for an occasion such as this.
As long as debts are paid (besides the house) I think contributing to a retirement account is something that’s often overlooked. It’s hard to think that far into the future, but being prepared will make things easier when that time does come.
I’ve invested in a 401(k) since the option was available through my employer. Not a lot comes out of each paycheck, but it grows quickly, especially with the employer match. There are many investment options and I’d recommend you discuss them with a trusted financial adviser.
Know the Difference Between Wants and Needs
This is a tough one for many (including me!), but it’s super important for anyone wanting to get their budget on track. Make a little room in the budget for a couple wants – a cup of coffee a couple days a week, a new app for your phone, etc.
A good way to try this out is to have a “spending freeze” for a specific amount of time where you only busy things that are absolutely necessary. While I haven’t personally tried this out yet, I think it’s a great idea.
Make a Budget
This is something I had been putting off forever.. we had a general one, but nothing written out. I FINALLY found I system I am super happy with. It’s digital and really easy to use. Both my husband and I use our debit card for everything… we’re not quite ready to switch to a cash system! Plus, we get bank rewards for using our cards. That’s why a digital system was a must for me.
This system links with our bank account so we can categorize and keep track of our spending. We use Mint by Intuit. It synced flawlessly with our bank account and I really like how it works!
“Do not withhold good from those to whom it is due, when it is in your power to do it.” – Proverbs 3:27
It doesn’t have to be big, or fancy, or even cost you money. It can be the giving of your time to help someone. But giving back to others almost always blesses the giver as much as the recipient.
These 5 habits are ones that I believe are some of the most important for diligently managing your finances. Saving, Investing, Budgeting, Giving, and knowing Wants vs. Needs are habits that will serve us well our entire lives.
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