If you are sat here wondering what it is that you are doing that makes you go uber broke at the end of each month, then you are not alone. The secret to getting better with finances, other than having money, is to develop financial habits that will allow you to live your best life and create financial independence.
You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.
– John C. Maxwell
So if you’re ready to get on top of your finances and make your money work for you, read on.
1. Switch from credit card to debit card
We have probably mentioned it before, but one of the best financial habits you can develop is to ditch the credit card. According to recent research, people are willing to spend more—as much as 83% in some cases—when paying with a credit card instead of cash. While there are numerous benefits to paying with a credit card there are also enormous costs that consumers are paying because of it too. Choose a debit card instead of a credit card. Debit cards offer a natural limit to how much you can afford as in general, you cannot go overdraft and spend more than you have in your account. So naturally, a debit card puts you in check with your finances.
2. Read at least one financial book a year
Becoming financially stable also means you’ll have to learn and follow the advice of people who live and breathe finance. Take advantage of their knowledge, make notes, and apply what applies to your life.
3. Spend mindfully
Mindfulness is a basic human ability to be fully present and aware of our actions, whereabouts and thoughts. It’s a great concept that should be applied to different aspects of your life, financial life included. Spending mindfully not only can bring you financial stability but also peace and joy in your life. So start practising being money-mindful today and avoid doing things on autopilot.
4. Automate your finances
You will do yourself a great favour here. With our busy lives and endless to-do lists, it is oftentimes difficult to stay on top of everything you have to accomplish in a day. Therefore, make sure you don’t end up paying late payment fees by automating your bill payments. You can also automate transfers into your savings account to help you get closer to your financial goals.
And by the way, automating your transfers is coming to Bankiom soon.
5. Arigato your money
This Japanese technique is so simple yet so powerful. In his book, Happy Money: The Japanese Art of Making Peace with Your Money, Ken Honda shed a light on how we can and should show gratitude to the money in our life. Arigato means Thank you in Japanese and it is common to say arigato whenever money comes in or leaves their account. When you practice gratitude for everything that is happening around you, you’ll notice you create more abundance in your life, are more patient, can find the silver lining and be happy with less in life.
6. Stay on top of your spending
Start tracking where your money is going. These are some of the things that people tend to omit in their tracking:
- Snacks they don’t want to admit they had
- Takeout coffee
- Shipping costs
- Charity giving
Tracking your spending will help you see the bigger picture and truly understand where your money is going which will help you make adjustments where necessary. You can track your expenses with a spreadsheet (Google Sheets are on the phone too), notes or a money tracking app.
7. Live frugally
This is probably one of the core habits you should look into developing. What do we mean by it? Learn to live below your means? Look at ways you can make better financial decisions in your everyday life. That means cut down on food deliveries, cut down on taxis, cut down on impulse shopping and review your nice-to-haves as maybe, just maybe, they might not be a necessity.
8. Know what you’re paying
The devil is in the detail. The majority of people do not monitor what they are paying which makes them overpay. You might be overpaying on your investment or banking fees, on your mortgage fees, on a bill in a restaurant because a waiter made a mistake. Make sure you always know how much you are being charged and if it is the right amount.
9. Pay extra on your debt
Paying the minimum on your debt might be a convenient option and your bank is making it easier for you however by paying extra on your debt you will pay it off faster but also will potentially pay less. Pay attention to your credit card statements as they will give you information on how long it will take to pay off your balance if you only pay the minimum payment, and how long it will take if you pay a fixed amount slightly higher than the minimum payment. Most of the time, there’s a significant difference.
10. Do everything with your end goal in mind
Whatever you are doing, have your financial goals in mind. Your whys determine your success and dedication, so make it a habit to keep your end goals in mind when things get tough because they will get tough at some point. If it helps, write your goals on a post-it note and stick them on your mirror so you see them every day. Your goals should be more than enough to keep you motivated.
Do you like our tips? Check out our blog to learn more about improving your financial life.
Don’t forget to download our app. We just launched in the UAE and with new features coming every month, we will help you organise, manage and grow your wealth.