Just like with anything else, you have to adopt healthy habits if you want to see a breakthrough over you finances. No matter where you are on this financial journey, a healthier lifestyle can only be achieved when you change your thought process as it relates to your money.
#1 Take time for your money
With each paycheck or maybe at the beginning of the month, consider taking time to study your money. Set aside a time where you, your spouse and family members can determine the direction for your cash. During this time, you should discuss the household budget, how much should be saved or spent.
#2 Plan for the future
Next, create a short and long-term plan for your finances. Identify financial goals, such as paying off debt, saving for a loved one’s college expenses, or simply building a better emergency fund. After you have identified both short and long-term goals, next determine the necessary steps you have to put into action to bring your goals to pass. Write these action thoughts and make them visible to see daily.
#3 Be prepared for tomorrow
Most importantly, create an emergency fund plan. Having at least three to six months of income set aside can help weather adverse financial mishaps. If you have had a hard time saving in the past, consider setting up auto drafts to have the money withdrawn from your account to fund your emergency plan.
#4 Free yourself from debt
Of course, there may be some debt that you cannot avoid, such as a mortgage or even perhaps a student loan to further your education. However, there are certain debts that you should work to eliminate or avoid, such as credit cards. Think of ways to eliminate this liability from your finances. List these debts from the highest interest rates to the lowest and pay off the most costly first.
#5 Create a system for your finances
Finally, the most important thing you can do for your finances is to create a system for your finances. Remember, it doesn’t have to be complicated, but adopt a system so you can know when your bills are due, locate your important financial documents, and at a glance have an understanding whether or not you are spending within your means.
Remember: your choice, your future!
Kemberley Washington is a professor at Dillard University and a certified public accountant. Check out her book, The Ten Commandments to a Financial Healing.
