We all like routines so the faster you can add on a new financial habit the easier it will be to make it something you do often.
Finances do not have to be complicated or complex. Part of learning financial literacy (especially for those with a low income) is to find more room for small wins. Instead of waiting until you have $1000 saved to be grateful for the extra $50 you put away unexpectedly.
Becoming wealthy or rich is the product of daily activities. Once you master which financial habits help progress your life doors will start to open.
Together with the help of Sam from Aussie-fi we created an in-depth list of 9 simple financial habits everyone should have especially when they're just entering the world of personal finance.
The key to success is to know what you want and go after it. Once you begin to implement these daily practices and find other people with similar mindsets, the world is yours.
Table of Contents
Before we dive into examples of great financial habits that you’ll want to start today, let’s define financial habit.
What is a financial habit?
You all know what a habit is right?
It’s something that you have become accustomed to doing. Something that you probably do without even realising you are doing it.
Think of things like biting your nails or cracking your knuckles - these are both habits.
Well, financial habits are exactly the same, just with money.
Chances are that you have many financial habits already, some good and some bad.
Developing good financial habits is a pivotal step in your generational wealth building journey.
What are good financial habits?
A good financial habit is one that is healthy, beneficial, and has a purpose. These habits would include turning on your bank overdraft so that if you ever forgot to put the correct amount in your account you would be covered.
Or automating your savings so that you know that each paycheck you are paying yourself before you pay someone else's company. Paying yourself first is definitely linked to financial stability.
A good financial habit is simply something you do that in some form involves money and will benefit your present self as well as future self.
What are bad financial habits?
A bad financial habit is one that has immediate consequences or will later on negatively impact you. Think of this as normalizing paying your bills late or not paying them at all.
Going into stores and aimlessly placing items in your cart with the intention of spending with a credit card and having zero intentions on paying it off in full.
If you have trouble saving for big purchases, wealth seems unattainable or your credit score is low and you don’t see any way to improve it, chances are bad financial habits are to blame.
The good news is that once you see that a lifestyle shift is needed, that is when the magic begins to happen.
Your mindset starts to open up to the possibility that just a few simple changes can pivot your entire life.
How do you develop healthy financial habits?
With daily intentions you will be able to form new cycles of managing your money and effectively building generational wealth. It’s all in your mindset and how you use your time each day.
Keep in mind we all have setbacks and each is a lesson to be learned. Part of building rich people habits is to keep going even when it is difficult.