Before we wrap things up, I’d like to take some time to talk about how you may want to handle your finances from now on. In truth, it all starts with your financial habits.
Your financial habits are important because they give you the greatest results. Bad habits can cause a lot of overspending, while good habits can help you wisely manage your money.
The Most Important Financial Habits Every Family Should Practice
In my opinion, the habits we will dissect below are some of the most important ones that all families should practice. They are habits that can help you make the most of the money you earn and spend less overall so you can reach all of your most important financial goals.
Under each habit, I will link to posts from this spending freeze challenge (or other posts that I have written) that can be of assistance if you need it.
Let’s get started!
Save a Portion of Each Paycheck
Too many people, including myself, complain that they don’t have enough in savings, or that they don’t have anything at all in savings. Here’s the deal: they need to make it a habit to save or it will always be put last and inevitably will not happen.
Each time you receive a paycheck from work, a bonus, a tax refund, or any type of income, whether you worked for it or not, put a portion of it into your savings account. If you already have a savings account you’re proud of, use some of that money to invest instead.
To make it even easier, be sure to automate your savings. When you set up direct deposit, you can choose to put a portion of your paycheck into savings. If you do this, you will never see the money in your checking account, and you won’t even miss it.
If you are in the habit of NOT saving, this should be the first habit you work on. Start with an emergency fund.
The people I know who do not budget are far more likely to overspend and/or find themselves in financial trouble. Budgeting is a habit. You have to set time aside each week or month to budget. It cannot come at the end of the month. The best time to budget is at the end of the previous month. So right now would be a great time to start budgeting for November.
I have read so many success stories about people who were in loads of debt or were living a paycheck to paycheck lifestyle, and they turned things around by simply starting a budget. It doesn’t have to be fancy or detailed. You can use a pencil and paper. It just needs to happen so you are not letting your money go without a fight.
Everyone has a different tolerance level for debt, but debt can really lead to worse things if it gets out of hand, so it’s best to not have it in the first place. If you do have debt, get it paid off ASAP!
We used to pay off our credit card every single month, and then we had to use it in an emergency one time and we are still paying for it. We could have paid it off by now if we had a steady income. Unfortunately, we can’t pay too much more than the minimum.
Paying the minimum on your loans and credit card balances may seem harmless. The minimum is only $50, you might think. But what you are really doing is “robbing your future self” (from a quote by Nathan W. Morris) when you decide to take the lazy route with your debt.
It wasn’t until this year that I really understood that happiness is made up of a lot of little habits. Not everyone can say they are content or happy with the way their lives are at the current moment. One habit that can help you be more content is being grateful for what you already have, and this can transform your finances like nothing else.
When you are content, you won’t need to go spend money on things you don’t need. You are fine with what you already have, and you know that spending more money won’t make you any happier.
This should really go without saying, but too many families are knee-deep in debt because they are spending a lot more than they actually earn. If you practice all the previous habits – saving, budgeting, avoiding debt, and finding contentment – this habit will be a breeze. It is a habit of self-control that must be learned before it is too late.
When you are in a tight financial spot, unfortunately you still must spend money on your needs – your mortgage/rent, utilities, food, insurance – but there are ways to at least cut back on those expenses so you can save some money. Even if you can afford to spend your money on more than just your needs, it’s a good habit to get into. Why spend more on the musts when you have so many goals and dreams for the wants?
It is a true habit to freely give of yourself, your time, and your resources. The habit of generosity and charity is one that I believe more people would love to participate in, but they haven’t figured out a way. I believe that once you can take care of your own family’s needs, you should shoot for helping others out.
It might seem like all the previous habits just set you up for a “boring” life. In my opinion, not really. Whatever else you want from life, I bet you can get it for free. You don’t have to spend a ton of money to have a good and happy life. Start brainstorming all the ways you can get your current desires for free.
I believe that as you incorporate all these habits into your life, you will notice that you spend your money with more purpose. You will reach your financial goals much more easily when you have been practicing good and sound financial habits.
Which of these financial habits could you work on as a family?
About Charlee
I used to struggle big time with getting veggies into my family’s meals. After several years and much trial and error, though, I now believe you can cook healthy food and still have time for your loved ones.
