Strong habits of people that are never broke

I feel that being financially independent is equally essential for both men and women. What does money mean to me? For me, money is security, its comfort in a sense; it is the ability to look after and see for myself having to rely on no-one. It is independence and provides me with the freedom to live my life on my own terms.

Over the years I have learnt how to become wiser with my money. I am no millionaire but I have no debt,  I have small savings and I can proudly say that I am comfortable financially. Herewith some tips or habits that I have developed over the years that may help you to save money or become financially comfortable.

Have a budget

At the end of the month, have a budget. Sit and jot down all of your expenses, get into the details of how you are spending your money. See where you can cut cost and save. Give yourself a leisurely amount to enjoy as well. As much as I am a believer in saving money, I do also believe that we need to enjoy what we work so hard for. So, if you would like that new dress and coffee machine, okay. BUT you do not need to get both these items from one month’s salary. Treat yourself to the dress, save the money that you would have spent on the coffee machine, and wait till the next payday to buy it. Throughout the month, you need to try and stick to the budget that you have drawn up as best you can. Yes, life happens, but not every month, there also needs to be discipline when it comes to spending. 

Have financial goals

Set financial goals for yourself. Like anything else in life, you need to work towards your goals, so setting goals financially gives you something to work towards. Add items to your goals, a new car, a house, new furniture or maybe you are saving for that well-deserved holiday, whatever it may be, set your goals. Sit down and figure out what matters in your life, and what you would like to save money for. Be specific with the goals that you are setting. Try and make it something achievable, with hard work and discipline anything is possible. Please also try and be realistic and set attainable goals. It is impossible to save 90% of your salary when you have not even considered your living expenses. You can also set long term and short-term goals. Example: Short term goal; I am going to save for three months so that I can buy myself that new coffee machine. Long term goal; we are planning on starting a family within the next year I am going to save money every month so that when the baby is born, I have a baby starter fund to aid me with the unexpected cost I may incur.

Live below or within your means 

People are always trying to “keep up with the Joneses” living beyond their means and spending money that they do not have. Why and for whom are you doing this? Who cares if you don’t wear name brand clothing, who cares if you drive a small car, who cares if you wear an expensive watch? If the people that you share your life with care or judges you on any of the above, than in all honesty you should evaluate whom you are sharing your life with.

I urge you to take control of your life and your money and live within or below your means. Living within your means is spending money that you have, why stop there live below your means. If you can spend thousands great, but you could spend seven-fifty of that thousand and save two-fifty. Do you see where I am going with this? Small savings here and there can go a long way later in life and help grow your savings.

What do you need vs what you want?

I often think that I need many things in my life when the reality is that I just WANT worldly items that often adds no real meaning or value to my life. So, when making a purchase especially one that is not within your budget you need to sit yourself down and ask, do I need this, be honest, imagine your life without this item, I am pretty sure in most cases life will go on without that big purchase. Keep this in the back of your mind, I want this, but do I really need this? You may be able to convince yourself out of that big spend. 

DON’T spend what you don’t have- Save for it

Try your best not to spend money that you do not have. Instead, you could you wait a while and save for it? Buying anything on credit results in you paying way more than you should. You will either be spending that extra money on interest on your card or on interest on a loan. WHY do you want to pay more money than needed on anything? Instead, add this to the goals that you have set and once you have the money go and spend it. Imagine what you could do with the extra interest money that you will be saving?

Have a savings life happens

As far as possible, always have a savings. Life happens; there will be unexpected expenses that occur. If you earn 1000 save at least 100 (10%) of what you make. As soon as you get paid move that money into a savings account that is separate from your daily accounts. What I have found helps a lot with savings is one of those notice accounts. Because when you want to spend money, you have to put in a notice to access the money, this gives you some time to think over what it is that you are going to use your money for. Again, what you want versus what you need will come into play here. Having a savings account is like having a safety net to fall back on. Nothing is permanent, death, illness, job loss, breakages in the house are a few of the many things that we think will never happen to us. What if it does happen, just what if, at least you will have some funds to fall back on and help you through the difficult times.  

If you have debt, try to pay more than the minimum.

As far as possible try to pay off your debt before you need to. Pay over and above the amount that you are required to pay. This will minimize the interest and shorten the payback period. It’s not always possible to pay more; I get that, if you could afford it you would not have taken out the loan or bought the item on credit in the first place. I am not speaking of doubling your payment; I am merely suggesting that if your monthly payment is a hundred try and pay one hundred and ten where possible. Small changes and contributions can go a long way in reducing the interest owed and shortening the payback time. 

Do something today that your future self will thank you for, start being sensible with your money. Small changes today will benefit you tomorrow.

Too many people spend money they earned, to buy things they don’t want, to impress people that they don’t like. –Will Rogers