It’s the new year and what better time to kick old habits. If you are looking for ways to make 2014 a more prosperous one for yourself, here’s Mozo’s starter kit of good money habits that will help you to save well, spend more wisely and reach your financial goals faster.
1. Set yourself money goals
Just as you would set yourself fitness or weight goals if you are training for a marathon or trying to lose weight, if you want to get financially fit you will need to set a goal or series of goals. What do you want to do this year? Get out of debt, buy a new home, take a trip or update your winter wardrobe? It doesn’t matter what it is but without clear and realistic money goals it will be hard to make smart financial decisions this year or any year.
And once you’ve set your goals, share them with a friend or family member. They can help cheer you on and celebrate your accomplishments.
2. Pay yourself first
Set up an automatic transfer every payday that goes straight towards your money goal. By automating the process you won’t even miss the money from your account. If you have a savings goal set up a high interest savings account so that your money is earning the best possible interest, if your goal is to get out of debt then put the money direct into your credit card account or mortgage.
3. Track your spending
This is a lot easier than it sounds and doesn’t require you to have a doctorate in excel. But by tracking your purchases you can see just how much you spend on dining out, pedicures or app purchases. Once you have a better understanding of where your money is going you can redirect it to areas that will help you reach your goals faster. Get into the habit of looking at your accounts daily (rather than monthly) so that you know where you stand and how to get back on track if you’ve let things slip. Some banks like NAB have money tracking tools as part of their online banking platform or you could try Moneysoft, a free budgeting and money management software that does the tracking for you.
4. Never step into a store (or website) without a plan
Have you ever been to IKEA to just buy a picture frame only to come out with new pillows, bath mats, candles and a set of knives? Impulse buying is one of the biggest money wasters and its a habit definitely worth breaking (you’ll be a lot richer for it). Before you head off to the grocery store, make out a list and stick to it. The same goes with online shopping, put together a wishlist of items you’re looking for and only buy what’s on the list.
5. Adopt a ‘cash is king’ attitude
It is a well-known fact that people spend more money when using credit cards than cash. Get into the habit of paying in cash rather than relying your credit card to pay for goods. And if you do your shopping online, rather than pay with a credit card opt for a debit card so that you’re spending your own money (not the banks).
Do you have any good money habits to share? Tell us in the comments.