Personal Finance

5 Ways to Build Smart Money Habits

Top 5 ways to build smart money habits for your future financial success

If you develop the habits of success,

you will make success a habit.

Read from John Maxwell’s book The 15 Invaluable Laws of Growth

Simple yet powerful statement. I’m a sucker for personal and professional growth books and every time I see a quote or line that resonates with me, I write it down in my little blue journal. So I wrote this one down because I thought it was so true and I simply never wanted to forget it. You could apply this to every aspect of your life. Personal growth habits, health habits, money habits…the list goes on.

Our success is not just determined in the grind year over year but rather in our daily routines and habits that drive our every move, decision and reaction.

Our habits have more impact than our stated goals because how does one work towards a goal without creating a strategy and formulating habits to help achieve said goal?! Is your goal to run a marathon? Great, you need to train. You need to build daily habits to get yourself prepared physically and mentally. The same goes for financial goals. Is your goal to save $1,000,000 by age 45. Amazing! Do you have a strategy or a plan to help you achieve this goal? If the answer is no, then let’s dive deeper into creating more intentional habits around your money.

Building solid and sound financial and money habits is paramount to establishing a healthy relationship with money and helping you create the wealth and financial independence you seek. It doesn’t matter if you are 23, 85 or somewhere in between or if you have $500 or $5,000,000, the difference on how far that money will take you is in your understanding and relationship with money, debt and investing.

Here are my top 5 steps to start building structure, intention and creating consistent, repeatable habits around your financial life.

1. Build awareness around your spending and get a deeper understanding of where your money is going and why.

If you don’t love it or need it – then it should go. Every week check in with your credit card statement or bank statement and look through it. Recognize and put your eyes on what you are spending your money on. This should take no more than 5-10 minutes. Start thinking critically – Do I need this? Do I use this? Do I actually even want this?

2. Spend less than you bring in.

Spending less can often be more crucial than earning more. The excess that remains can be used for an emergency fund, for retirement, to pay off debt, for other short term or long term financial goals, you name it. The point is that there will be excess. That excess and what you choose to do with it, is what will drive your future financial success. That excess will eventually become your financial freedom!

3. Establish financial goals and commit to strategies to achieve them.

Create a list of the things you want for yourself or family – a house purchase, a trip, a car, an investment or to start a business, etc. Become acutely aware of the things you want from the money you work hard for. Once you’ve determined and written down those goals become more intentional in establishing strategies and savings plans in order to achieve those goals. Motivation will get you started but your discipline and consistency will determine your ability to reach your goals. Start SMALL and remain consistent. It’s a marathon, not a sprint.

4. Create a healthy relationship with debt and a dynamic where whatever you purchase, you can afford to pay for in full.

In a world where we are all trying to keep up, please don’t be that person who is visibly rich and reality poor. You are only hurting yourself and your future and are impressing no one. Debt can, at times, be a useful tool in creating wealth, but mismanaged and abused debt is a trap and a hole that you do not want to get stuck in.

5. Last and certainly not least, INVEST.

Make a game plan. Proactively invest EVERY SINGLE MONTH. I don’t care if it’s $5, $500 or $5,000, get into the habit of putting money away on a monthly basis and have it work for you!!

Start small, stay consistent and get in the drivers seat. You need to be in control of your money, not the other way around!

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