Good Money Habits To Learn And Apply in Your Life Right Now

When it comes to good money habits, let me ask you a question

Are you enforcing good financial habits or not?

if you are not sure what is good or bad money habit

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Read my post below as I collected all the good money habits under one roof

We all commit few bad money habits in our lives

What is most important is to learn from our mistakes and never let it happen again

Now let me start with the below

Create a budget and stick to it

If I speak to you for 10 days to convince you the importance of building a budget

It would be in vain if you don’t try it for yourself

I know you may think, what is a budgeting?

Well, I will ask you a question and be honest to yourself

Do you know what is your mortgage or rent percentage to your income?

I bet you only those who maintain a family budget can answer this question

Think about all other expenses like groceries and gas

If you have a budget, you would be able to monitor your expenses

And try your best to stick to the numbers you assigned before you start the month

As shown above if you use one of my budget sheet in excel or even word and PDF document, you will be able to calculate the percentage of every expense according to your total income

Pay yourself first

Paying yourself first is one of the top good money habits

What does it mean?

Simply you deduct money from every paycheck when you get paid

Before you start spending your income to cover expenditures

You take that deducted money and force it into investment channels

By doing that, there is no chance of facing any deficit of meeting your deducted obligatory amount

Set financial goals for yourself

Not setting financial goals for yourself is similar to going camping without tent

I was on the phone with my financial advisor and I asked him this question

How much do I need to contribute to obtain $100,000 in 10 years for kids’ education

His reply was very rapid, just by investing $5,000 annually with 7% interest

My money will be doubled in 10 years

My idea is you have to decide how much you want after 10 years or when you retire assuming you have decided when to retire

Auto transfer money to your saving account

Nowadays all banks have the feature to auto deduct a percentage or specific amount on your paycheck day

Assuming it is biweekly on Friday or whatever, you bank can auto transfer your agreed upon amount to your saving account

I know I spoke earlier about paying yourself first but auto transfer is essential if you plan to buy big item like car or electronics

Buy generic brands

I discussed before in previous posts the concept of buying generic brands

Especially when saving money on groceries

I want to take this advice to apply it on everything

Take for example, electronics like TV if you buy a generic brand instead of the well known brands

You could be saving 50% of the TV price

I will tell you an idea, I was hesitant to buy generic brands like you

One day I decided to buy generic brand and add extended warranty on top of that

Save money coming from side hustles, bonus and tax refund

If you are making money from rental property or side hustles then save that money

All financial advisors tell you to imagine that you are not making that money

I know it is easy to say that but it is hard to apply

I know a lot of people start making commitment before getting their bonus

While others they do the same for their tax refunds

Again this is one of the top good money habits if you are able to apply it on yourself

Use a jar for your spare change

I know what you would think

You think I am acting cheap and making an issue out of the spare change

Don’t under estimate what you can do with your spare change

I know you will change your mind especially if you read my penny saving challenge

Read it and see what you will be able to accumulate in saving at the end of the year

Have fun with money saving challenges

If you are one of those who enjoy taking few challenges

Then I encourage you to apply one of these 52 weeks money saving challenges

To lessen the burden with so many money saving schema

You can simply use your money saving challenges towards saving for big items

Don’t be fooled by any sales

Recently I was in one of the big box stores, I noticed a good winter jacket on sale

I have to admit, the price was very enticing, I held it in my hand

Started to use all of my logic to resist buying it

Well I did that because I know I have more than 5 winter jackets

And buying a new one especially during the pandemic is really a big waste of money

I acted rational but I know not everyone will act the same

Build an emergency fund

Building an emergency fund is one of the good money habits that can take you to the next level in your financial life

It is a very simple financial habit that few people know about

You simply save $1000 or more on a separate saving account

It has to be easy to liquidate and hard to reach

Are you confused? I will explain it again

Make your emergency fund money in a way similar to cash

A saving account that can make you a little interest but not in bond or stocks

You should be able to use it in case of emergency

Also know what you own and not lose its value when liquating in case of stocks or mutual funds that can lose part of its value

Keep it out of reach by having the money in separate bank account so you make it hard for you to touch the money

I will leave the reach part for you to decide it on your own

Plan your meals with shopping list

Nothing can save you money better than using a shopping list

It can be on a sheet of paper or you can use a mobile app

I actually prefer to use a mobile app called AnyList

It integrates with Amazon Alexa and this make my life so easy

If I remember any thing to buy before going for my weekly grocery shopping trip

I just call Alexa to add it to my shopping list app

Stay out of debt

I believe getting the feeling of relief after paying of your debt is the second best feeling

It comes next after the feeling of someone telling you that he loves you or the feeling of your first kiss

If you are one of those who are really in debt

Do yourself a favor and read what I wrote on how to get out of your debt

I was in debt but once I got out of it, I will make sure never to fall again in debt

Similar to being cured from addition or successfully quitting smoking after a long battle of trials

Practice living on less than what you make

This is what we call it living frugally

I know when I speak about it to people close to me

They make fun of it and see it as a cheap and useless way of saving money

I am a true believer of living a frugal live

Remember I live a frugal not a stingy living

What is the difference between being frugal and not stingy?

Well, I go with my family to restaurants every now and then

Me and my wife can order a family plate for 2 persons to save money

So I am not against to eating out but it is just a simple practice to save money

Also I use my own bags when doing grocery shopping

I hope you get the idea of living frugally

It is one of the good money habits that you need to adapt and practic

Invest early on retirement plan

I started investing on retirement when I was 37 years old

After wasting 15 years that’s why I wish everyone can avoid my mistake

Good news is if this is your case and you haven’t invested in retirement saving yet

It is never too late, start now and fast track by contributing more into your retirement account

This is one of the mandatory good money habits you have to do

Don’t forget to invest in kids’ education

I invest way more in kids’ education than in both my and my wife’s retirement plans

I cannot imagine seeing both of my 2 kids not being able to join college because they cannot afford it

Of if they join they graduate with a huge debt that each more than 10 years of their life

I know some parents don’t care but that’s not me

Buy used items instead of taking a loan

I admit I learned this good financial habit the hard way

My previous car I bought it new from a dealership on 5 years installment

With I believe interest 1.7% APR – Annual Percentage Rate

Monthly payment of $530

After 3 years my car was worth less than the remaining installments

If I sell it I will still be paying the dealership out of my pocket

Bottom line, I knew that buying big items like cars and TVs should be planned ahead

Especially for cars, nothing wrong from buying used cards

Save fund for your gifts and parties

Every now and then we have birthdays to attend and buy gifts for

Also we have parties like Thanksgiving or Christmas – those are not a surprise party

Every year same birthdays and parties come on same days

We decided to plan for them

You can keep any stores gift cards to buy gifts for your next birthday event