You may think that being financially successful requires a lot of work. The truth is there are so many small things you can do that will improve your finances. Whether you pay yourself or avoid debt, these financial habits will set you up for success.
Set Up an Automatic Savings Plan
Many people have a problem with just putting money into a savings account. If this sounds like you, consider setting up an automatic savings plan. The way it works is that money will be transferred from checking to savings automatically. This will make you look at the amount like a bill. It's much easier to put money into savings when it happens automatically.
Avoid Debt
You want to avoid debt at absolutely all costs. Yes, there are some purchases in life that will require going into debt, such as buying a house. However, going into debt to buy a new TV or gaming system is not financially smart. You want to save up the money and then make the purchase.
Use the Envelope System
If you have trouble sticking to a certain budget when it comes to variable expenses, use the envelope system. The way it works is that you set aside a certain amount for each variable expense and put the money into envelopes. When you go shopping, leave your credit and debit cards at home and only use the money in the envelope. This forces you to stick to your budget.
Give Yourself some Fun Money
People often jump on board with tracking expenses and saving money and then forget that they need some money to spend on fun. When you don't allow yourself at least a few dollars to spend however you want, you get tired of making smart financial choices very, very quickly. You'll begin to feel as though you're working yourself to death and have nothing to show for it.
Each pay period, make sure you're budgeting some fun money for yourself that you can spend on anything you want. It doesn't matter if it's only $20, having fun money will make you much happier. If you're still paying off debt, you're fun money may be non-existent for awhile, but make sure to budget it back in when you're debt-free.
Challenge Yourself
Last, but not least, challenge yourself to save money. For example, you might do the 52 week savings challenge. With this challenge, you start by putting back $1 during the first week, $2 the second week, so on and so on until you put back $52 on the 52nd week. This is a great challenge for anyone who has trouble getting used to saving money each week.
If you want to be smart about your finances, consider starting just one of these habits. It can make a huge difference in how you spend or save your money.
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