As with every area of our lives, some of our habits when it comes to our financial health aren’t so great. Whether it’s overspending, under-planning, or avoiding it altogether—our bad habits are hurting us on our path to financial success.
To help motivate you on your own financial journey, we’ve compiled a few healthy habits of people who live debt free.
Live within your means
A large part of staying debt free is living within your means—essentially, what you spend each month is less than or equal to the amount of money you’re bringing in. This looks different for every person, but it requires checking in with yourself often and asking, “Do I need this?” or, “Can I afford this?”. Maybe this means being realistic about the type of car you can currently afford to drive, or the amount of money you’re willing to spend on a haircut. It definitely does not mean living off of your credit card, or falling prey to online sales and impulse buys.
Be willing to confront your current financial situation
You can’t tackle your debt if you don’t know exactly what your debt looks like. Although it can feel scary to open your latest credit card statement or check the exact balance of your bank account, you must be willing to confront your finances to be able to control them. Living a debt-free life requires being honest and brave about your current financial situation, however bleak it might look.
Track your spending
One way to avoid ever opening another mystery credit card bill is to track your spending and create a budget. By tracking purchases in a spreadsheet or app, you’re able to see a clear overview of your weekly, monthly, and yearly spending and easily pinpoint any unhealthy patterns or habits that might need correcting. Creating a budget, whether it’s dollar by dollar or just a general allocation of funds, helps to hold yourself accountable and figure out how much you have left to spend on things like leisure and entertainment once your basic needs are met.
Set goals and develop a plan to reach them
Just as it’s important to confront past financial mistakes and track current spending, it’s equally as important to plan for the future. People who are debt free will set financial goals for themselves and have a spending plan in place to reach these goals. Whether it’s saving for a house, putting money aside for retirement, or working to pay off a loan, setting SMART goals (specific, measurable, achievable, relevant, time bound) is a great way to stay on track to financial success.
Work with a professional
If your car breaks down, you’re probably not going to open up the hood and attempt to fix it yourself. Similarly, if you’re having financial issues, you should talk to a trusted advisor or consultant—someone who knows exactly how to help. The habits above might seem overwhelming at first, but financial success is easily achieved when you're working with the right professional. You can connect with a trusted debt advisor or consultant on Vexxit today.