5 Keys to Breaking Bad Financial Habits
We all have good and bad habits with money. Many of these habits came from what we learned as kids at home. As adults, we may not have taken out the time to evaluate the true worth of these habits, attitudes, and beliefs about finances. The good thing is that we’re not stuck with these bad money habits. Here are five key tips and tricks to break those bad financial habits.
How Bad Do You Want It?
It’s been said, “if your why is strong enough, then the what doesn’t really matter.” Do you know the reasons why you’re taking the financial reins in your life? Is it so you can rest easy at night and not worry? Is it for a loved one or spouse? Is it to pass something onto your kids? Are you seeking to reduce financial pain points in your life? Psychological studies have shown that pain is twice as powerful as pleasure. A person will work just as hard to earn 2 dollars, as to avoid losing 1. Whatever your reason is you have to decide that the future will be different and move forward.
A preacher once said that the most dangerous word in the Bible was tomorrow. Many have said that they would start something tomorrow, which often becomes never. W. Clement Stone, a self-made millionaire who built his own insurance empire, repeated maxim was: Do It Now! You don’t need to have all the answers to begin. With many areas, the ‘Ready, Fire, Aim’ approach is often better than sitting on your hands, wondering when things will improve. Learn as you go, but do it now!
Buy Luxuries with Smart Money
Do you buy a new car, a great pair of shoes, or a white tablecloth dinner at a trendy restaurant with cash or debt? Far too many finance the fun things with credit cards, which sucks money out of your pocket and deepens the debt. It’s better to invest in true assets and use the cash flow or equity from those assets to buy the fun things like a dream vacation, a new car, or even beautiful diamond jewelry.
Automate Parts of Your Finances
Building good financial habits is like a marathon – 26.2 miles of grind. Many keep up for a bit and then fall by the wayside. Keeping up good habits is one of the hardest things to do. One way to keep your focus is to automate parts of your finances. If it costs too much time, effort, or energy, you won’t keep up with it.
In nearly any place of employment, you can dedicate a certain percentage of your paycheck to go to a savings account through a direct deposit. You can also automate certain bills to be deducted at certain times of the month. Using these automatic processes frees up your time and effort to focus on finding ways to increase your cash flow and looking for other investment opportunities.
Have a Mastermind Group to Advise You
A mastermind group is a small group of success-minded people. They come together to sort out business issues and be accountable for their actionable items. According to Napoleon Hill, in his classic book “Think And Grow Rich” the idea is that “all of the minds together, are more than the sum of their parts.” A mastermind group allows the members to draw on their collective wisdom and help one another. This type of committee can help you make serious strides towards good financial habits.
Building good financial habits do not have to be difficult. It’s often a few key choices rightly applied over time that builds a solid financial future.