When it comes to money, adopting smart habits and applying them with consistency and creativity can help guide your path to financial independence and well-being.
Here are money habits that can change your life for the better. These habits are not only effective, but they’re easy to implement and maintain. Following these habits, can help you improve your financial situation, reduce money related stress, and increase your ability to enjoy security and freedom.
1. Know Where You’re Money’s Going
Recording, reviewing, and understanding your income and expenses and their impact on your financial situation is one of the most valuable things you can do. Getting started is easy! There are a lot of different ways to do it from something as simple as recording purchases in a notebook, to setting up an income and expenses spreadsheet you can track from month-to-month. Use your bank statements, credit card bills and sales receipts to track spending and you can begin to look for ways to cut unnecessary expenses or augment savings.
2. Create and Stick to a Budget
Sticking to a budget may be the single most impactful thing you can do to begin to understand and control your financial life. Budgeting simply means allocating the money you have to spend to categories based on your priorities and goals. Divide your spending into simple categories such as monthly bills and predictable necessities, savings, investments, debt payments, and discretionary spending. Approaching your personal household budget with consistency and discipline can help you understand where your money’s going and how to gain better control over unnecessary spending while uncovering ways to increase savings or reallocate funds to the categories that are more important to you and your financial success.
Choose a method that works for you and stick to it. Review your budget at least once a month and adjust it as needed. Track your progress and celebrate your achievements. By following a budget, you will be able to live within your means, save more money, and attack your financial goals with confidence.
Need help getting started? Talk with one of Canopy’s Financial Coaches. They can help you set spending priorities and create a basic budget. We look forward to supporting you on your budgeting journey!
3. Pay Yourself First
Paying yourself first simply means setting aside a percentage of your income for savings and investments before paying any bills or expenses. This habit helps you to build wealth and secure your future. It also helps you to avoid spending money on things that may not be important or necessary.
Set up a direct deposit or a transfer from your checking account to your savings or investment account that happens automatically every time you get paid. How much you can afford to pay yourself first depends on your personal goals and situation. The important thing is to begin by establishing a disciplined approach to saving and investing as soon as you can. By paying yourself first, you’ll grow your money faster and approach a position of financial security sooner. Talk to a Canopy member services representative to help you get started.
4. Make the Technology Work for You
Taking advantage of online tools and apps to automate your payments, transfers, and investments can help you organize and visualize your money in a new and powerful way. It can help you to save time and avoid careless errors while making it easier to stick to your budget, pay off your debts, and invest your money more consistency.
Set up recurring transactions to pay bills and make credit card and loan payments. Automatically move money into savings and investment accounts to help your wealth grow over time.
Take a look at Canopy’s online banking features and talk with a member advocate if you need any help getting started.
5. Pay Off Your Debts
Paying off debts can help you save money and reduce financial stress. It also helps improve your credit score, increase your cash flow, and move your closer to achieving your financial goals.
To get started, simply pick a debt and create a goal to eliminate it. You can pick the smallest one so that paying it off feels easier or the biggest one to make it feel like a greater accomplishment. Choose an approach that helps motivate you to take on the task and attack it consistently until you drive the balances down to zero.
Being debt free means you’ll have more money for savings and investments. You may even feel more empowered, less stressed and more able to enjoy the freedom and flexibility that come when you eliminate burdensome debts.
6. Invest, Invest, Invest
Putting your money to work for you by investing in assets that generate income and appreciate in value can help you create the financial growth and security you’ll need as you move forward in life.
The benefits of investing are enormous, and you don’t need to be rich to get started. Consistently setting aside a few dollars a month is all you need. Growing your wealth through investing can help you beat inflation, increase your net worth, and create multiple streams of income for your future. Harnessing the power of compound interest, means your money will begin to grow exponentially over time.
Talk with a Canopy Financial Coach for more ideas on how to begin investing in your future.
7. Good Habits Encourage More Good Habits
Human beings are creatures of habit. We take comfort in doing things that feel familiar and encouraging. Creating a healthy meal, engaging in a regular exercise regimen, staying active and mobile by taking regular walks or making time for daily meditation or spiritual devotion are all healthy and productive habits that help us feel more grounded, energetic, and engaged with life.
Stacking good money habits with good habits you’ve already developed can help reinforce and ingrain those life changing money habits over time. For example, every time you get paid, make a point to pay yourself first. Before you go shopping, take a moment to ask yourself if it’s really something you need. Linking your money habits to your existing habits, you can help you create a powerful routine that can help transform your life.
Adopting Life Changing Money Habits Can (Surprise!) Change Your Life
Adopting positive money habits are the key to building the discipline and consistency you need to change your financial life for the better. Making these seven money habits part of the way you deal with your finances, can help improve your relationship with money, reduce your stress, and increase your sense of security and financial wellbeing.