Every year you make goals to spend less, save more or become debt-free. The beginning of the year is one of the best times to assess and adjust your financial goals. To achieve financial success, developing good spending habits are of equal importance to saving or earning more money.
Financially successful people have daily habits which help them to achieve their financial goals and are an important part of their wealth creation process.
To help with your financial success, perhaps focus on developing small daily habits, such as some of the practices below.
Below practices could help you to make wise financial decisions and accomplish great things this year.
1. 70/30 rule
Wealthy people create more wealth by paying themselves first, avoiding unnecessary spending where possible. You could use the 70/30 rule to spend your money wisely. Save 30% of your income after tax, meaning the lifeline of your budget is the remaining 70%. This should be used for paying your living expenses and loan repayments.
2. Live within your means
Keep your living expenses as low as possible and only spend less than what you bring in each month. Once you know your net income after tax, reduce unnecessary spending to fit your earnings. To keep track of your spending, create a budget. Budgeting might not be simple if your spending strategy didn’t work for you in the past. However, it is important to not give up, sometimes just little changes can help your plan to work.
3. Set priorities, not desires
Constantly reminding yourself to stop spending money may make you feel less powerful. To motivate yourself and eliminate the fear of not having enough money, try to shift your thoughts to spend on things you truly value. Whether you want to take a short-trip, buy a new car, eat organic food or spend more time with family, identify your priorities and spend money wisely on your meaningful goals rather than on momentary temptations and conveniences. You may not be able to control the outcome of your desires, but you could certainly control the way your goals turn out. People with meaningful goals and purpose in life are successful.
4. Read every day
Spend some time reading every day. There are many helpful books, articles and publications that might assist you in getting on top of your finances. By reading the stories of financially successful people, you could get more ideas and inspiration to develop your own financial strategies and lead a productive life.
5. Eat healthy food
Make smart food choices to build a highly productive lifestyle. Spend money to buy healthy food which will provide better energy and nutrients to your body. It will help you to reduce stress and sleep better. By cutting out sugar, high sodium, packaged, processed and fast foods you will become more alert, active, creative and productive.
6. Network and volunteer
If you shop or go out for drinks when bored, you could end up spending money unnecessarily. Instead, reach out to others, spend time volunteering or attend good networking events. The wealthy and successful often form the board or committees for non-profit organisations. Developing a valuable relationship and networking with successful people could increase the chance to meet prospects for your business, or help you further your career.
7. Reflect and reassess
Watch where your money is going. There could be a mismatch between what you try not to spend on and what you actually end up spending on. Assess your bank statements often and find out if your expenses are lining up with your defined goals and priorities. By regular evaluation you’ll be able to realign your expenses to match your goals.
Habits that are formed by our thoughts and actions soon become our daily lifestyle, playing a crucial part in decision-making. While bad habits take you away from your desired goals, developing good habits could help you to create a successful life.
What are your smart spending habits? Please feel free to share it with our readers.