It can often seem like you’re never quite where you want to be financially, no matter how hard you try. Sure, you have grand plans of saving huge chunks out of every paycheck, never splurging on anything ridiculous, and basically just making 100% responsible decisions. However, let’s be honest – what kind of life doesn’t include a bit of ridiculousness every now and then? If you’re constantly making yourself miserable denying yourself everything you want, from a $5.00 latte to an inexpensive dress, then you’re doing something wrong.
Resolutions involving finances are probably the second most common resolution that people make, after the resolution to lose those last few pounds, start eating healthier, and get in better shape. However, it can be easy to feel discouraged a few weeks into the year when you find yourself reverting back to old habits.
Instead of totally giving up, maybe it’s time to change your mindset a bit. You see, it’s not always about making perfect decisions 100% of the time. Instead, it’s about cultivating certain habits that will help you get to where you need to be financially without having to get down on yourself for a little splurge here and there.
Here are 13 financial habits you should cultivate in 2016 to make this year your best ever.
13 Create a budget
Okay, yeah – budgets aren’t exactly the sexiest thing in the world. However, if you have certain financial goals that you want to achieve, they’re basically a non-negotiable. You need a budget. Now, while it might seem tedious, it actually doesn’t take long to make one. First, you just jot down all the financial constants in your life – the amount that you’re making every month, and the amount that you absolutely need to be spending on things like rent, car payments, bills, etc. Then, look at what’s leftover and divide it up between things that are a bit more flexible – your entertainment money, groceries, shopping, etc. The beauty of it is that you make it work for yourself – so if you’d rather be a bit more economical with your grocery budget in order to
12 Now, create a realistic budget
Okay, okay – I know it’s tough enough to start creating a budget if you’ve never done it before, but take a moment to sit back and think. Sure, you might have drafted a phenomenal budget that has you saving a huge chunk of money every month. However… is your grocery bill really going to be that low unless you’re eating nothing but rice and beans? Are you going to be able to say no to your friends every single time they want to do something because your fun and entertainment budget is a strict $0.00. If you have really pressing goals that require you to buckle down and focus on nothing but saving, that’s totally fine. However, try to be realistic about your budget – that way you won’t feel guilty when you find it tough to keep your self-imposed regime.
11 Check things out regularly
We’re not saying that you need to be obsessively tracking every penny that’s entering and leaving your accounts, or calling up the bank every week to get an update. However, make it a habit to keep an eye on things – that way you won’t end up with the dreaded moment of checking your bank account after a month or two and realizing that you have way, way less than you thought. Thanks to technology, it doesn’t take long – download a finance tool like Mint or You Need A Budget, or even just download the app for whatever bank you do the majority of your banking with. Schedule ten minutes once a week to go through the week’s finances, and either see where you might be going wrong and quickly correct it, or give yourself a little pat on the back for kicking butt that week.
10 Make things easy for yourself
Very few of us have just one card for all our banking needs. From your trusty debit card to the credit card that gets you the best rewards, to that other card you have from way back when… things can end up a little crazy if you don’t monitor them carefully. There are hidden fees, and deadlines for payments, and you can find yourself getting bogged down just trying to manage all your accounts. If at all possible, try to consolidate everything into one account. That way, it’s far, far easier to get a quick overview of how things are going, and you’re less likely to miss anything important.
9 Set up an automatic transfer to your savings
Everyone has heard the saying pay yourself first, but many tend to ignore it. After all, once you’ve made all the necessary payments towards bills, loans, and everything else in your life, it can be tough to take away a huge chunk of what’s left just to transfer it to your savings. Visions of girls’ dinners out and fabulous shoes might start to fill your head as you imagine what you could buy with that little bit extra at the end of each month. Don’t torture yourself with that kind of temptation – set up an automatic transfer that moves some of each paycheck into a savings account. If your budget is incredibly tight and you can only manage $20.00 each paycheck, that’s still something! Just automate it to make sure that you don’t talk yourself out of saving.
8 Pay off your debt
Let’s be honest – nobody likes to be in debt. It’s just another bill to funnel money towards every month, and it can also be the source of a lot of anxiety. So, make it a habit to start addressing your debt, if you have it. After all, it does absolutely no good to just pay the minimum month after month – you end up getting nowhere. If you have a big car loan, or perhaps most common, a student loan, there’s a good chance that you won’t get out of debt within a single year. However, make a plan so that you can see an end in sight – it’ll make it that much easier to put some of your hard earned money towards paying it if you realize that it’ll be over in a few years.
7 Set up a “screw this” fund
Okay, ladies, let’s face it – sometimes, life happens. A relationship goes bad, your boss is making your job absolutely terrible, or you have a full blown breakdown after working long weeks and not taking care of yourself. Unfortunately, when your finances aren’t where you want them to be, you can find yourself staying in a situation that isn’t healthy just to make sure you don’t end up broke. Help your future self out, and set aside an emergency fund – or, as we like to call it, a “screw this” fund. That way, if you need to leave and get your own apartment, if you need to quit your job and have enough to live off of for a few months while you search for another, you’re all set.
6 Don’t beat yourself up
Concrete actions like saving are important, but your attitude is just as important when it comes to your finances. It can be easy to tear yourself down for splurging on certain things you didn’t need, or for failing to save a certain month, etc. However, a negative attitude will have absolutely zero impact on the numbers in your accounts – it’ll just bum you out. Make it a habit to see the positive in your financial situation, no matter what you do. Sure, everyone screws up now and then – but choose to look at what you gained from the experience and what you can change for next time, rather than just on hating yourself.
5 Stop comparing yourself to others
We get it – you work hard, and it can be tough to see people buying things that you’d absolutely love to have. Are you lusting after that penthouse apartment while living in a teeny shoebox studio? Are you wishing you could peruse the racks at Saks and Neiman Marcus instead of H&M and Target? It’s fine to lust after the finer things in life, but don’t make the mistake of living above your means in order to get them – that’s how you end up in financial trouble. Don’t try to keep up with the Joneses – be happy with what you have, and use those things you wish you had as a motivator. Someday, you’ll have them too – when you can easily afford them.
4 Try to check your impulses
Look, in the words of Parks and Recreation’s Donna, sometimes you absolutely need to treat yo self. You work hard! However, try to manage your impulse buying if your financial stability and security is important to you. You can absolutely make the decision to save up and splurge on that designer bag if it’s something that’s important to you – sometimes the anticipation can make it even more satisfying once you finally get it! However, if you find yourself regularly strolling into the store and buying things you really can’t afford – or simply charging them to your credit card to be dealt with later – try to check that impulse, before you wreck yourself financially.
3 Have a long term plan
You need to find out what’s important to you – and it doesn’t need to be the same thing that’s important to someone else. Are you someone who loves security and craves a big, fat, nest egg so that you don’t need to worry if something happens? Are you trying to save up for a down payment on a house or apartment? Are you dreaming of taking your first vacation in years and just laying on the beach for two weeks straight? Whatever your goal is, keep your eyes on the prize and draw up a plan to help ensure you achieve it.
2 Take advantage of technology
Everyone’s brains work differently, and some people are huge devotees to the tried and true paper and pencil way of doing things. However, many of us use technology for almost everything in our lives – so why not your finances? Whether your goal is to simply keep an eye on your finances, whether it’s to track where your money is going so that you can make a better budget, or whether it’s aggressively paying off your debt, there’s likely an app for that. They can be a great resource and motivator, so take advantage of them.
1 Pay everything on time
Look, this might seem simple, but seriously – pay your stuff on time. It’s as easy as that. You work incredibly hard for your money, so why would you want to throw a ton of it away on fines, late fees and interest charges? Set an alarm on your phone, write it on a calendar that you see every day, make it an automated payment, whatever it takes – just don’t get caught paying extra because you totally forgot to send in money that you literally had sitting in your account.