5 Top Tips for Building Money Habits That Will Change Your Life!
Before we get into it, there are a couple of key principles for building money habits you need to get your head around.
Number 1: Your Relationship To Money: Understanding your relationship with money will give you insights and awareness on what you need to change.
Number 2: What Do You Want Your Money To Do? Make a plan for your money, the lifestyle you want to have, the age you want to stop working, the things you want to buy, the experiences you’d like to have, the contingencies in health and life you need to plan for. Identify the gaps in your knowledge so you can get help, to get you there.
Number 3: Hire A Finance Coach. There are many female finance coaches out there who understand the nuances of female employment pathways and some of the limitations or barriers women face during their income producing years. A good finance coach can teach you sound money management practices and help you develop a plan for your money, so it’s there when you need it most.
As women, it is critical to our future and to the future of our girls that we learn and teach wealth creation strategies to secure our long term financial stability.
There are some great books and resources to build your knowledge on finances and wealth creation principles. Make this mandatory reading to ensure the advice you get works for you.
- Know Your Numbers: What does it cost you to live per week? List out your income and all your expenses. Calculate what your average income is per week, then do the same for your expenses.
Watch out for the temptation to leave things off your expenses list, whether it’s alcohol, getting your nails done, weekly fashion expenses or habits like vaping, these are all expenses that you spend money on and should go on your expense list.
The more specific and accurate you are, the better equipped you are to fix it. Once all of that is done, take a look, what do the numbers tell you?
- Manage Your Expenses: The goal here is to stabilise your expenses so that it’s the same fixed amount each month. This is where you need a budget. When you’re expenses are fixed you have a greater ability to plan and make changes.
Which Expenses Could You Reduce? By planning your meals, could you reduce the number of trips to the grocery store and reduce your average grocery bill?
What Expenses Could You Renegotiate Or Shop Around For? For example, could you negotiate a better interest rate on loans, insurance or phone plans?
- Pay Yourself First: Insurance companies know that if you have to think about paying your insurance they have a 60% chance of getting the money, but if they automate the process through direct debit, then the probability of you paying insurance goes up to 95%.
It’s a concept you can use on yourself for savings. Set up an automated savings account. Set up an automated deduction from your account the day you get paid. Developing the habit of saving is critical to your success.
- Pay Off Debt: List out all your debts, work out how much is owed for each and the time it will take to pay it off.
Order them in terms of time to pay off. Pay off debts with the shortest amount of time first. Use any surplus funds to make additional payments. Once the first debt is paid, go to the next on the list again directing surplus funds to this debt. Rinse and repeat until all your debts are paid off.
- Invest Surplus Money At The Highest Interest Rates Possible. This is where financial literacy and building your wealth creation knowledge will support your goals. Working with a financial planner will help you understand your risk profile, along with the investment strategies that will suit your goals.
Make a commitment to continue to learn and build your skills in this area so that you can be financially secure regardless of your employment status, your relationship status and your health.
Making these vital changes in what you think and how you think about money, can literally save your life. It’s worth the investment of time, building knowledge, skills and know-how to secure your future, so take a look right now, where could you start?
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About The Author
Jenny Moutou is a mum, visionary, coach and business woman, who has walked the road less travelled. As a trauma survivor, she undertook an extraordinary journey of self-healing and self-mastery. What she discovered along the way was her innate ability to turn her pain into her superpower.
As CEO of She Leadership, Jenny has combined key leadership principles and spiritual practices, to coach women around the world to do the same. Her mission is to empower the girl to lead, because she can!
Jenny runs programs online and can be contacted by email info@sheleadership.com.au