Have
you ever noticed how many people are in the gym on January
2?
But
a few weeks later, it's business as usual again. Why? Because forming good
habits takes time and a real commitment.
You
can’t just wish your way to doing it — you actually have to DO
IT.
If
you want to be good with money (like Oprah-level good), here
are seven financial habits to start forming today.
This
is one resolution you can make last.
1. Track your
spending.
Ever
wonder where the hell all your money is going? Now you can find out.
It
may sound like a lot of work, but writing down everything you spend is the
fastest way to open your eyes to reality. Ninety-five percent of my clients are
surprised, even shocked by what they spend when they see it all laid out.
Spending
can become so automatic that we don't even realize we're doing it. Writing down
what you spend in an actual (i.e., paper) journal or with an app will help
you become more conscious about where your money is going. And while you might
initially be hesitant to face the numbers, just knowing where you stand can
take a tremendous weight off your shoulders.
2. Use the
48-hour rule.
We've
all done it: bought something on a whim only to get home and really, truly
regret it. To prevent buyer's remorse, implement the 48-hour rule. It's exactly
what it sounds like — giving yourself 48 hours to decide whether you want to
make a purchase.
Based
on your spending and goals, you decide the dollar limit for when this rule
kicks in. For example, you might choose to use the 48-hour rule for any expense
over $200, $300, even $25.
Once
you leave the store you'll probably find it's not worth the trip back to get
the item you wanted, and if it is, you most likely won't regret the purchase.
It takes the impulse out of spending and helps you be more intentional about
where your money is going.
The
threshold you choose might also be a great threshold for conferring with your
partner. It saves a lot of stress and surprise when couples decide on a number
and discuss any expense above that.
3. Start saving small.
Why
stress when you can plan for expenses you know will be coming up? For example,
if you anticipate spending $500 on holiday gifts, decorations, and
entertaining, why not start saving now to make your life easier? If you put
away money every month beginning in January, you would have to save only $41.67
each month to reach your goal of $500 by the end of the year.
Do
this with any expense from a vacation to wedding gifts to a new TV. Ask
yourself what items you can start saving for now. How much do you need to put
aside each month or each paycheck to reach that goal in time? Write it down and
start doing it.
4. Automate your savings.
Not
all habits have to happen consciously. Make saving even easier by automating
your transactions. It takes willpower out of the equation and frees up your
time to concentrate on other, harder habits.
I
highly recommend opening a savings account that's completely separate from your
checking account. This creates a true separation between savings and what money
is available for spending. It also typically takes a couple of days for money
to transfer from savings to checking, which can help prevent impulse purchases.
5. Think like an investor.
Ask
yourself, How can I make my money work and grow for me?
If
you're putting savings aside, why earn a measly .01% interest rate at a
brick-and-mortar bank when you can earn 1% on your money in a high-interest savings account online?
For
longer-term goals, you might want to invest in the market for more substantial
returns (depending on your risk personality). While starting to invest
can sound daunting, it's more important to get started than to be perfect. Put
aside a small amount of money in a brokerage firm such as Vanguard or Schwab
and practice buying and selling shares of various index funds.
6. Ask for what you want.
You'd
be surprised by how much in life is
negotiable. You can negotiate your rent, gym membership, cable, even your dry
cleaning bill. And remember, you won’t get it if you don't ask.
If negotiating for your income or expenses
sounds intimidating, start small. Everything gets easier with practice. What
are some things you've wanted to ask for but have been putting off? Commit to
asking for them this week.
7. Talk about money.
If
you're like most people, you'd probably rather talk about the intimate details
of your gynecologist appointment than talk about money. Since it's such a
tricky subject to broach, we sometimes avoid it altogether. But that's not
going to help you reach your goals.
If
your best friend knew you were trying to save money, she might stop inviting
you to those sample sales. If your partner knew you wanted to build an emergency fund, he or she may help you come up
with ways to save more and spend less together.
Start
confiding in your closest family and friends about your money goals. It will
introduce accountability into the equation and you'll
have a support system to help you keep up the good habits.
This
article originally appeared at DailyWorth. Copyright
2015. Follow DailyWorth on Twitter.
