It probably doesn’t seem like it, but daily routines involving money can have an enormous impact on your overall financial health. Buying a 4 dollar latte, for instance, isn’t a big deal, but if you make that purchase a daily habit, it can quickly become a costly routine.
Financially successful people are well of aware of the impact that financial routines can have; so they hone in on smart money habits to better their situation daily. You can also better your financial life, starting today, with these smart money habits:
Automate your finances
One of the trickiest parts about sticking to habits is actually finding the time and willpower to accomplish them during a busy day. While you can’t teleport to the gym daily, you can remove this obstacle in finance by automating some of your smart money habits.
Socking money away, for example, is a habit that’s easily swept under the rug. Thankfully, you can automatically set it so some of your income goes straight to your savings account. That way, you can build an emergency fund or have money to invest, rather that using it in your checking account.
Save, don’t spend, your excess cash
The best way to utilize a windfall of cash (like a bonus or gift) is to pretend you can’t immediately spend it. While a shopping spree at the mall might feel good for a short while, it’s no route to long-term financial success.
Get in the habit of putting that money to work instead. Using any newfound money towards your financial future, like investing for retirement, will pay off for years to come.
Control your emotions
“If you cannot control your emotions, you cannot control your money,” said Warren Buffett.
Unless you can sever the emotional ties to your finances, improving them is only a temporary solution. Whether it’s emotional shopping or knee-jerk reactions to the stock market, you can (and should) train yourself to remain rational. One great way to do this is to keep your overall financial goals in mind, which will help you realize that emotional reactions aren’t usually in your best interests.
Adopt a long-term view
Adopting a long-term view is also crucial for effectively managing your money. Once you realize the enormous value of investing and compound interest, those “must-have” purchases won’t seem as desirable anymore. Instead, you’ll use that money to brighten your financial future. You’ll start to realize that those frivolous purchases are the opposite of luxury and fun. Achieving your long-term goals might not have that same initial zing as a new handbag, but you’ll be happier and more successful person because you stuck to them.
Have an abundance mindset
Using smart money habits is tough if you frame them in terms of what you can’t do or spend. And who wants to think with that negative attitude?
Instead, consider using an abundance mindset, and coupling your goals with big-picture accomplishments instead. Suddenly, you don’t have to cut your budget; you’re allowing your money to grow in a stock portfolio instead.
Do you have any smart money habits that have increased your financial success? Share them with me on Twitter!
If you want to learn more about investing and increasing your financial well-being, check out my firm LexION Capital.