If you tried to follow every bit of financial advice you’ve received during your lifetime, there’s a good chance you’d run out of time before acting on every money-saving tip. That’s not to say you should give up on potential savings or turn your back on financial opportunities. Every incremental cost-cutting measure indeed helps stretch your earnings, but you may be able to generate even better results by adjusting your underlying financial habits.
Each individual manages money according to his or her goals, values, resources, and level of financial understanding. Though some financial decisions are more productive than others, people pursue their own monetary priorities, so there isn’t a single “right” way to conduct your financial affairs. Despite differences in the way people handle their finances, you can learn from successful people and model your behavior after their best traits. When you put their habits under scrutiny, you’ll actually find many prosperous individuals share a similar set of financial attitudes. Incorporating their money habits and philosophies in to your own financial behavior can help you consistently generate positive financial outcomes.
Change Your Attitude about Earning and Spending
Your financial life is long, but it’s conveniently broken in to small, easy to manage pieces, called pay periods. The key to long-term financial success is reconciling your paychecks and monthly cash flow with your larger monetary goals. For consistent results, you may need to change the way you think about money.
If you are like many UK earners, your income is largely spoken for, before it even arrives. Monthly obligations, such as rent, mortgage payments, credit card bills, car loans, communication costs and other repeating expenses take a big bite out of your earnings, leaving you with limited discretionary resources. Although it may be tempting to claim the monthly surplus as your own “pocket money”, taking that approach can create a negative cycle. Instead, adopt a new mindset, in which the months’ “extra” money is applied to a progressive spending goal, such as a house deposit, car fund, education expense, or household rainy day account.
Protect Yourself from Overpaying
Consumerism unfolds at a blistering pace, and marketing pulls buyers in every direction. To take control and pay the proper price, try slowing down and lay the groundwork for prudent financial decision-making. If you need a new car, for instance, don’t rush to buy, until you’ve taken the time to compare makes, models, features, and reviews. Similarly, when you need financing, whether it’s car finance or a payday loan, explore lending alternatives online and evaluate offers from several sources before making commitments.
Envision Your Success
Setting goals and identifying the best ways to reach them are essential tools for individual money managers. Just as athletes train their minds to gain a competitive edge, you too can advance your agenda by envisioning success. To stay focused in the right direction, first outline your most important financial objectives. Are you eager to step on the property ladder? Is your child approaching college age? Do you need a new car?
Identifying your most important financial goals removes the guess work from saving; excess funds are automatically applied to your financial priorities. If you haven’t already put by money for emergencies, one of your first objectives should be reserving enough financial resources to cover 3-6 months spending. With this general fund held in reserve, you can set about realizing your financial vision.
Financial security most often grows over time, resulting from deliberate, consistent behaviour. Until you identify effective money habits and make them part of your daily routine, financial success may remain elusive. For outcomes you can count on, take control of your financial mindset, pay the proper price for goods and services, and promote the power of positive thinking, by visualizing successful scenarios.