3 TIPS FOR DEVELOPING GOOD FINANCIAL HABITS

No matter how young or how old you are, it is never too early or too late to start developing good financial habits. It is easier to develop good financial habits than it is to break bad ones. Good financial habits can lead to a happier and more fulfilling life. Here are three basic tips for developing good financial habits.

Tip Number One.

Do not spend more than you earn.We have all heard this one before and it sound so obvious, yet most people still end up in debt during their lifetime. According to a 2021 CNBC article, the average American has over ninety thousand dollars in debt. Once you get into debt it can be very difficult to get out of it. Try avoiding debt as much as possible. Whenever you think about buying something, ask yourself a few important questions. Is this a need or is this a want? Do I have the money available to pay for this right now or do I have to use a credit card or a loan to pay for it? If your answer is credit card or loan, you may want to reconsider that purchase altogether, or delay the purchase until you have saved enough money to pay for it.

Tip number two.

Pay yourself like a bill. We all have bills to pay each month. Most people give priority to the bills that cover their basic needs. Some of examples of those bills are mortgage, rent, utilities and food. Next, people tend to pay bills that cover some of their wants. Then, if there's any money left, they might put it into their savings account. What if you considered yourself an important bill that needs to be paid? After all, you earned the money. Shouldn't you make yourself a higher priority and keep some of the money that you earned? One simple way to pay yourself is to set up automatic savings. Many banks offer this free tool when you open a savings account. Just allocate a portion of your income to automatically go to your savings account each time you get paid. You may have to sacrifice something that you like in order to pay yourself. It may seem difficult at first but eventually it will make the act of saving money become a habit.

Tip number three.

Create a budget. Creating a budget will make tips one and two much easier to accomplish. A budget is one of the most basic tools for developing good financial habits because it allows you to see how every penny of your money is being used. Many people make a lot of small purchases every month that add up to a significant amount over time. Two five-dollar cups of coffee purchased five days a week adds up to two hundred dollars each month . Five dollars may not seems like much when it is being spent, but two hundred dollars does. Having a budget will allow you to see trends in the way you use your money and make it easier to make changes to your financial habits. If you would like help with a budget or other personal financial needs Easy Budget Finance will be delighted to help. Visit us at easybudgetfinance.com and schedule an appointment for a free consultation.

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Sources:

https://www.cnbc.com/select/average-american-debt-by-age/