It’s important to have a positive money mindset because it may help decrease stress and improve your overall well-being. It’s also the first step to becoming financially secure today and in the future. Creating a healthy mindset starts when you set goals, develop better money habits and define where you want to go financially.
Here are 9 steps you can take to develop better money habits starting today.
1. Visualize Success
What works for athletes and other highly successful people can work for you and your money habits, too. Visualizing accomplishments is the first step in going from having bad money habits to creating a positive money mindset and achieving financial well-being. Here are some things you can visualize before actualizing:
- There’s a four-figure balance in your savings account … and it’s growing!
- Your highest-interest credit card is paid off — that zero balance is going to feel amazing!
- You have extra money at the end of each month to be charitable.
- A comfortable retirement will be a reality because the balance in your 401(k) is growing with your contributions and the maximum employer match available.
- There’s money each month for self-care so that you can get your nails done, play a round of golf, or even buy simple things like a new bath bomb or scented candle to enjoy at home.
- You’re on vacation at a beautiful resort that you saved for and paid for in full.
2. Be Hungry to Learn
No matter how you learn — by doing, listening or reading — there are plain-talking financial experts who share their wisdom for free. Absorbing this kind of knowledge regularly can help you develop better money habits. From personal finance websites and budgeting worksheets for good money habits to the Prosper blog and money-themed podcasts, there’s a wealth of information available to enhance your budding positive money mindset.
Some other resources you might consider include:
- Vanguard Financial Lessons
- NPR Planet Money Podcast
- Mr. Money Mustache
- A Purple Life
- Mo’ Money Podcast
3. …But Not Hungry to Eat Out (Or Often)
Is it old fashion? Yes, but eating breakfast at home, making your own coffee, and packing a lunch and snacks are some of the things that successful people with good money habits do regularly. This doesn’t mean you can never go out to eat with friends or coworkers, but when you make your own meals and brew your own coffee or tea more often than not, you will save a lot of money and be more financially well-off than ever before.
4. Log Into Your Financial Accounts Every Morning
It’s a small step while the coffee is brewing, but as they say, knowledge is power. Every morning, bring yourself up to speed on your bank account, personal loan balance and credit card balances. In a spreadsheet, keep track of the money coming, going and due. Doing so will eliminate surprises, reduce stress and give you a clear financial picture to start each day. This quick and easy routine will go a long way to helping you make better decisions and developing a positive money mindset.
5. Weigh Every Decision
It may seem obsessive, but when you think about it, nearly every decision you make has the ability to affect your financial life. This is one of the reasons setting a rolling three-month budget can be helpful. When you know that sticking to your budget means you’ll have a certain amount to put into your savings account in two months’ time, you’ll start to question whether you really need to spend extra money on this or that today.
For example, you’re walking down the street and see a tempting fruit smoothie sign in a cafe window. You want one but it’s going to cost more than $6 and you have frozen fruit in your freezer and that blender you bought months ago is still sitting in your cabinet. That $6 might not seem like a big deal, but if you spend an extra $6 four times a week, that’s nearly $100 a month and $1,200 a year that could have been saved. Think about where you could go and what you could do with that money. When you consider every financial decision, you’ll develop better money habits, and better understand the value of a dollar and its impact on your money mindset.
Better money habits: 6. Save First, Spend Later
People with positive money mindsets and better money habits don’t make savings the last item on their budget, only to be added to if there’s money leftover. Instead, put your savings goals first and foremost, and adjust the rest of your life accordingly. Do you want to buy a house or car, take that dream vacation or build an emergency fund? Great! Dedicate money every month to those savings goals first, then list all your fixed debt obligations (rent, car payment, groceries, utilities, internet and phone bill, etc) before finally seeing how much you have left for takeout and extraneous spending.
7. Spend and Shop Smarter
One of the better money habits you can have is to shop and spend smarter for everything you want and need. This means using coupons at the grocery store, comparison shopping online for bigger ticket items, and checking the cashback available through sites like Rakuten before you buy … pretty much anything. Not only will this extra ‘effort’ while shopping save you money, it may also help reduce emotional and impulse purchases, which will save you even more money!
Pay Down Your Credit Cards Every Month
One of the biggest financial stresses most people face are their credit card bills. If you are going to use credit cards, which can be beneficial to maximize cashback bonuses or travel rewards, it’s crucial for your financial well-being that you learn how to manage credit card debt. Most importantly, that means not spending more than you can afford to pay off. Paying on time will not only improve your credit, it’ll keep late fees away, save you money and reduce your financial stress.
9. Consolidate Your Debt
Learning better money habits today is crucial to a happier life going forward; however, you may still be reckoning with mistakes from your past. If you have old debt spread out over a number of credit cards, medical bills and more, consolidating that debt into one loan with one monthly payment at a lower interest rate may have huge financial and emotional benefits.