One of the ways to get your finances together, is to ditch your keeping up with the Joneses or Kardashian mentality, and develop healthy financial habits normally displayed by the rich. Below are the top five financial habits that can help you become financially fit.
1. Pay all your bills on time. Paying your bills on time not only keeps your credit report and FICO score squeaky clean, but also can save you thousands of dollars in the long run. It also opens the door to receive low-interest rates and unbelievable purchase deals.
2. Follow a monthly budget. I am a serious advocate of having a budget, for it is the one thing that has changed my financial situation and kept me on the path of financial success. Besides how are you going to achieve financial success if you don’t even have a plan?
3. Establish an emergency fund. Financial guru’s say that an emergency fund should be in the amount of 3 to 6 months of your salary. I totally agree, for if you’re ever in the position of losing your main source of income, at least you have the funds to take care of yourself and family while you work on plan B.
4. Pay your credit card balances in full at the end of each month. The rule of thumb is if you cannot afford to pay your credit card bill off at the end of the month, you should save up to purchase the item. Simple translation….purchase items when you have the cash on hand and can really afford it. Yes people, plastic money is not real money.
5. Save on a regular basis. Saving is a discipline that all humans should strive to have. Here is some awesome math that supports this habit
Savings + compound interest x 10 to 20 years = lots of money
So there you go. The five habits that can help you become more financially responsible and lead you to financial independence.
What are good financial habits that you practice on a daily basis?