When it comes to altering your bad money habits, things can seem difficult. However, with self-discipline, you can alter your bad cash habits and control your finance properly. Usually, this involves taking a firm decision in order to make it.
In this post, you will find some of the crucial things that you must take into consideration in order to alter you bad finance habits.
Make a choice
The first step in solving a problem involves making a decision to start tackling it and altering your bad cash habits is no different. Why? Because you must first think about what you are going to do and then be prepared to handle any resulting outcomes from that decision.
Being able to control your cash flows will enable you to have power over your finances and in turn, you can positively use that control to re-shape your life. Once you make the initial decision, you need to stay determined and committed every day if you want to see your idea to break the bad money habits chains through.
How far down the rabbit hole are you?
From the moment you start having bad financial habits, things are likely to turn south quickly since one mistake will lead to another and so on because you will not be trying to correct your mistakes in the beginning. In the event that you fail to recognize you have a problem, you will end up in financial crisis within no time.
How far down the mucky road are you? Ask yourself the following questions to get a rough idea of where you are:
• Are you one of those people who pay their bills late?
• Have you halted some basic expenses because the money is not sufficient?
• Are you spending more than you are earning?
Organizing your finances
Taking charge of your money problems early will ensure that you live according to your means. If you notice you have difficulties controlling your finances, it is prudent to start thinking about that right way to avoid giving up your necessities when trying to regain control over your money. In order to be successful in this endeavor, you must focus on essential things and postpone pleasure by mastering the art of willpower. In addition, you must differentiate between bad debts and good debts so that you can take advantage of the latter.
Managing your debts
In most cases, the actual culprit in your bad money habits is not the debt. However, there exist bad and good debts.
What is the difference between a good debt and a bad one? A good debt is the type of debt you incur for investments – the investments will likely make more cash for you. On the other hand, bad debt is the type of debt you incur for pleasurable things – buying things like clothes and cars which will likely return nothing.
Don’t wait until things are intolerable before making the all-important decision of taking charge of your money; rather, try to enlarge your means at every turn. You can easily achieve that goal by increasing assets that will generate more cash for your rising needs.
After receiving money from all your sources of revenue be it tax refund, gift, salary or profits from your assets, take a certain percentage of 25% to pay yourself. What about the rest? Share between your investment account and your savings account.
A long journey starts with one step – start the lifelong journey of altering your bad money habits.