You Develop Your Money Habits, and Then Your Money Habits Create Your Life
Good Money Habits + Time = Financial Stability
Sometime’s it’s hard to remember what financial stability means, right?
It means you don’t have to stress if you will be able to cover your mortgage, your bills or the loans… by the way, it also means you will be most likely debt-free.
From brushing your teeth in the morning to always going to sleep on the left side of the bed in the evening, our days and lives are an endless chain of habits.
Good or bad, they are always there, waiting for us to follow them.
So, let’s discover what habits are and how they impact us.
Small Intro on Money Habits and How They Affect You
“The great breakthrough in your life comes when you realise that you can learn anything you need to learn to accomplish any goal that you set for your self. This means there are no limits on what you can be, have or do.”
In this post, we will talk about money and money habits. Believe it or not, whatever you do with your money right now (this month or even, today), you do it because you are used to doing it in this way. Meaning, it is your money habit.
The worst thing about habits is that they could lead us to self-destruction and poverty. The great thing about habits is that they could lead us to our happiest reality ever.
I’ve seen people on both sides, and I’d guess you have your examples too.
It is not up to your habits where you’ll end up.
It is up to the person who creates them – You.
An Unpleasant Side Note
I usually stay away from blaming and pointing out obvious things. It’s not polite and might hurt people’s feelings.
But it won’t be fair to sprinkle magic dust and make things look easier than they are.
No matter if you finish reading this post, scan it or get into its depth, it won’t do anything for you.
In fact, nothing and no one in this world could do anything for you or instead of you.
I’ve waited for years things to “finally change”…
It doesn’t work that way.
Neither my simple article nor the most prominent money guru will be able to change your life.
So, let’s get to work.
Find You Bad Money Habits
You cannot remove a habit?
Alright. But you can only replace it with another one, right?
To do that, you need to know which habit you want to replace.
Are you aware of all of your bad money habits?
Are you sure?
Let’s find out in 3 simple steps:
- Catch your bad money habits
- Tie them on a piece of paper (write them down)
- Do the change
Catch Your Bad Money Habits
You know them.
You just prefer not to acknowledge their existence.
I’m the same.
I have a confession to make…
I overspend on craft supplies.
I love paper and spend my free time creating junk journals from scratch, just for the fun. But I’ve got a room full of craft supplies, and I keep adding to it, even though, there’s enough stuff in there for the whole next year.
Let’s use my bad money habit as an example here.
I acknowledge it and admit I’ve got it (feels like I’m an AA member).
Now it’s your turn.
Make a rough list of the habits you’d like to change. Here’s mine:
- Overspending in craft shops
Let’s Analyse Them
Under each one of the habits, write down the certain conditions that lead you to put your bad money habit into practice. Here are the thoughts that ran through my head while thinking about my habit of overspending in the craft shop.
Overspending in craft shops
I do not go to the craft shop if I’m with someone else as I don’t like to feel rushed to go out of it.
Every time I go to the shopping centre by myself I know I will stop by the craft shop too.
I go to the shopping centre by myself only if I have to buy something (I have a purpose for the visit).
I usually go first to the craft shop as I feel inspired to see new things.
If I go to the craft shop after I finish with my other shopping there’s a better chance I stay inside for less time and spend less or no money at all.
Did you see the pattern?
The solution to my problem with overspending is in changing the pattern that usually leads me to overspend. If I leave the craft shop to be the last shop I visit, I will be already fed up with walking between the aisles. Most likely, I will spend in there just a few minutes. The fact I don’t like walking with bags in my hands is a plus – I will be urged to get rid of the bags.
Now, I know that this might not work for you, but that’s the beauty of the situation – the solution is in your hands.
There’s a pattern.
Creating confusion on a subconscious level will give you time to change the outcome.
My Gift For You – Free Printable, Instant Download, No Email Required
I love free printables and if you are anything like me, you love them too. But you don’t like you have to type in your email and subscribe to… whatever.
I’ve got you covered on every level here.
I designed a free printable you could download instantly from here (I will place a link at the end of the article too).
It will help you list your bad money habits and find the pattern of each one of them.
Moreover, you will find a beautifully designed list of all of the 20 smart money habits I will talk about below. Pin it above your desk, on your fridge’s door or anywhere else you will see it daily. Choose one or more habits to implement starting today.
Stay focused and inspired.
How Long Is It Going To Take You To Break or Replace a Bad Habit With a Good One?
Ah, the magic wand is out and is waving in the air…
Imagine it’s going to take you a year.
You have to stick with it just for a year.
Sounds too much?
Most likely it will take you less than that. But I prefer to set up a long time forcing myself doing stuff, so I forget there’s a deadline.
When you were a child, your mum used to remind you to brush your teeth every night for months… or even years, right?
Pretend you are a child again and have the patience to keep reminding yourself what to do and why you should do it for as long as it takes. Not more. Just as long as it takes.
You might find out you enjoy your new habit after a week or a month. Or you could hate it for three months in a row but still know it’s going to change your life in a great way.
Stick with your new habit for as long as it takes to become the invisible habit “you forgot you have”.
20 Smart Money habits You Want To Know About
In case you wonder what to replace your bad habits with, here is a list of 20 things you could change in your life.
I have implemented most of them and let me tell you – it’s worth it.
And it’s not only about saving money. It’s about developing discipline and creating more goodness in your life.
Therefore, instead of listing the habits only, I will name them after the way they will benefit you.
1. Save Time – Grocery Shopping Once a Week
This one could save you tons of money.
The statistic says the average grocery store contains over 39 000 items. Even the most frugal spender will be likely to get one or two things more in the shopping trolley. The temptation is way too big and the solution is only one – go there less often.
I grocery shop once a week no matter what, and I want to say it’s because I’m a frugal spender, but it’s mostly because I’m lazy. It works for me. I meal plan every week and buy everything our family needs for the planned meals. If I run out of something I change the meal and cook something I have the ingredients for. The only thing I run to the shop once a week (occasionally) is bread and milk. The shop at the end of the street is expensive and I know by going there I won’t find any “deal” I will fall for.
If we are focused enough, we usually spend a little bit less than an hour in the grocery stores. If we have to visit it one more time during the week it would take us another 20 minutes at least. I do not include the time spent in driving to and from there.
With that said, going once a week to the grocery store could save you at least an hour every week. That’s a minimum of 52 hours for the whole year, which is 2 full days and an extra 4 hours…
If you need more motivation, just list how many things you could for two days. I guarantee it works.
2. Develop a New Skill – Learn To Cook From Scratch
I know you know.
Cooking from scratch is healthy.
It’s also boring…
But have you ever thought of looking at the process not just like an annoying thing you have to do for the rest of your life, but as a skill?
Cooking is a skill that not everyone masters. That’s why the ready-meals exist. It is not so much because we don’t have the time to cook, but simply because we don’t enjoy it.
I don’t say you can’t cook. I say you don’t enjoy it.
Look at the cooking as a skill that has to be practised and developed. There are plenty of free cookbooks, Youtube videos and cooking shows on the TV that give you ideas on how to cook from scratch everything. And let me tell you, it’s way more delicious than the ready-meals you usually buy. Plus, it’s cheaper.
In fact, to make it easier for me, I started trying one new recipe every week. If it happens to be delicious it goes into my recipe book. If it doesn’t, I just move on.
3. Eat Healthier – Prepare Your Meals and Coffees From Home
I work from home.
I don’t have a choice and I have to prepare my meals for work from home… I don’t have where else to eat them 🙂
My fiancée doesn’t work from home though. When we met he was buying his food and coffee every day. After that, he was complaining of money “disappearing” from his account without him buying anything noticeable. When I asked him to calculate how much he’d spent on things he buys while at work, he was shocked. He was spending a minimum of £200 per month on sweets, sandwiches and coffees. I don’t know about you, but £200 are a lot of money in our family.
I started packing his launches when I can and preparing a coffee for him every morning. If he wanted a second coffee he would get it, but it would lower the amount he spends with 50%. That’s a win for us.
4. Stay Fit For Free – Exercise at Home
With the number of videos on Youtube how to shape your body, grow your muscles and discover your 6 pack, it’s very unlikely for you to need something more from the gym.
Let me put a disclaimer here and say that if you have a membership and visit the gym 3 or 4 times a week, these are well-spent money. Keep up the work.
However, this new money habit is for those of us who have the great goal to be healthy starting from Monday, next week or January the 1st next year, or .. you get the point. That future point where our healthy lifestyle will start from… never comes.
However, the bill from the gym does.
And we pay it no matter what because we signed the contract. So, now on top of the fact we feel guilty, we don’t exercise, we are poorer too.
Let’s eliminate them both, cancel the membership and discover Youtube.
How lazy are you today? Very? Choose a 5-minute video how to move your fingers and create a six-pack on your palm… better than anything else.
5. Have a Purpose – Set a Financial Goal
There’s a lot of books and articles written on the importance of setting up goals.
The reality is – you need them so you know the right direction.
For example: If your goal is to eat, then your action should be – cook.
It’s the same with money.
Why would you save if you didn’t know why you do it?
Is it to cover your debts?
To pay for your children’s education?
To go on that holiday you dream about for the last ten years?
Set it up. Write it on the whiteboard and look at it every time you feel you are losing the motivation to keep doing the right thing.
6. … And Rewards – Find the Pleasure
Saving and only saving will get on your nerves very fast if it’s not something you’re used to doing.
Therefore, rewarding yourself for your effort is as important as everything else.
Many financial advisors will mention “pay to yourself first” technique. It means when you get paid to put money aside for yourself. Not on bills or loans. For yourself. Is it going to be a small investment in a hobby? Dinner in the local restaurant? A football game with friends? Invest in your own pleasure, it’s always worth it.
To me, this is my crafting hobby and my £20 per month on craft supplies.
7. Be Responsible – Plan Your Expenses Ahead – yes, even your holiday 8 months from now
This is tougher than anything else you read so far in this post.
I talk a lot about this habit in my book The MOB – The Money Organiser Bundle.
The idea is to write down every little thing that’s going to cost you money this year. This includes birthdays (even your grandma’s birthday has to go here), holidays, school supplies, college payments. It does not include the regular monthly payments, only the ones you do once or twice a year.
Write them down in a calendar and set up a certain amount of money you would like to spend on it. Then open a separate bank account for them and start saving in it a little bit every month. Create a plan that’s comfortable for you and stick with it like it’s something you owe to the bank. You owe it to yourself which makes it even more important.
Let me list the steps one more time:
- Write down every single event that’s going to cost you money by the end of the year (birthdays, holidays, school or college fees, weddings you go on, etc.)
- Choose an amount of money you will need for it (no matter if it’s £10, write them down)
- Open a separate bank account.
- Start saving in it as much as you can and feel comfortable with.
- Don’t think about it anymore.
This habit only could save you thousands of pounds yearly and maybe keep you away from getting into another debt.
8. Get Smarter, Change Your Money Mind-Set – Read Books for Free
I love to read.
Starting from a very young age, my late grandmother taught me that there are millions of worlds around us and we call them “books”.
But reading a different book every week could be expensive. At the same time, saving money shouldn’t restrict us from learning new things, diving into other worlds and finding the little pleasures in life around us.
Last year I signed up for Kindle Unlimited for a project I had with my other blog. I had to read 10 of the best love and relationship books ever written and review them after. I read half of them for free with Kindle Unlimited. If you don’t have a subscription with them, and you love reading, I strongly recommend you have a look at what they offer.
In fact, if you sign up through this link you will have one month for free, and if you find out it’s not for you, cancel it before they charge you for the second month.
9. Stand Up For Yourself – Learn To Say No to Things That Eat Up Your Budget
This is one of the healthiest habits on this list. And it saves you money.
I know a few people I love that they are very good at persuading me going to places and buying things. They don’t do it so I could spend all of my money. They just believe I need to buy this stuff and I must go to these places because I will enjoy them. And I know I will.
But I also know that they will ruin my budget for this month. I know that by spending the money on one thing, I say No to saving them and paying debt off, or putting them into that separate account for the birthdays and the holidays…
Buy saying Yes to one thing You say No to another.
It is your choice, and no one else’s to decide which things deserve your Yes and which things you could postpone.
10. Outplay The Stores – Shop After Big Holidays
Did you read what I said about the stores in this post about the importance of the grocery price list? Their job is to take your money. My job is to help you keep them.
We all know that to shop after the holidays is cheaper. Yet, a month before Christmas everyone goes crazy and attacks the stores buying things in bulk just because… well, I don’t know why.
I avoid going to the shops in December. I get anxious having to deal with finding a parking spot (in less than an hour) and making my way through the aisles. I choose one day of the month and spend it out to buy all gifts (if I haven’t bought them before that) and that’s it. It saves me money and it keeps my sanity.
How do you do it usually?
11. Be Your Money’s Boss – Give It a Job
You get paid, your money goes into your bank account and stays there waiting for you. You wait for the bills and let’s summarise it – it’s a waiting game.
Well, no if you implement this money habit.
This is something I don’t practice but I intend to.
The idea behind it is to have a few separate accounts dedicated to different money-goals. Once your money enters the main account you spread them into the other separate accounts and give them a job.
For example, you have one account for the plan-ahead-spendings (birthdays, school, college, etc.). Your second account could be your “emergency fund”. You could have a third one for saving for a house, etc.
The reason you want to “give your money job” is to not leave them hanging just like that, waiting for something to happen. “Something to happen” is usually you going to the mall and seeing “a must-have-bag” or “one-more-drink” or “I’m lazy, let’s go to a restaurant one more time this week”. Meaning, things you don’t really need and won’t serve you any good in the long term.
12. Create Memories – Spend Time Not Money When Out and About
This is a little tricky.
Going out with friends always means spending money in one form or another. Here, you might put “Say-No” in practice, but you and I, both know, that we live once and we need to enjoy our time while here.
Spend Time Not Money is a wonderful habit to cultivate. It simply means that you and your friends should choose activities that allow you to interact with each other, have fun but not spending so much money. Having dinner out every week is fun, but taking turns to visit each other’s homes every week saves you money and it’s probably healthier.
13. Win the Battles With Yourself – a lesson I learned from a 5-year-old child
I have a 6 years old niece. She is pure sunshine in my life and every time I go to see her I give her something. Sometimes it’s a toy, a book or money. I give her just a few pounds, but she is always so happy about it. She runs to grab her piggy bank and starts shaking it to show me how full it is. She saves every coin someone gives her so she could buy a certain doll of some collection or something else.
Let me say that it’s something her parents teach her and it’s not a result of they not having money to buy her whatever she wants.
Once, we went out to Poundland and I wanted to see what she really likes in it, so I gave her a pound and told her to spend it on whatever she wants. She was walking between the aisles and I could see she’s battling herself about something. I thought she liked a toy that costs more than a pound so I told her if she does, I will get it for her. (I can’t say No to this girl about anything and she knows it). She looked at me with her big brown eyes and said she doesn’t want to buy anything because she wants to put it in her piggy bank. Her serious tone meant the battle was won. She was even smaller back then, so I thought “Oh my, a 5-year-old just taught me a huge money lesson! Prioritise and have a piggy bank.“
Have a piggy bank and save your pounds for something that matter to you, don’t spend them on a “pound-worth” stuff.
14. Be More Comfortable With Yourself – Talk About Money
Did you know that people prefer to talk about their bedroom activity with a stranger but not about money with their partners?
Since when the intimate stuff became more comfortable subject than money?
Nothing wrong with having a good talk about intimacy, but we should feel equally alright opening “the other” subject too, right?
If you have to take a few deep breaths before opening your mouth in front of your partner, you have a problem. It is not in my knowledge to know the reason for this, but I could tell you – it is not alright.
Regularly check your bank accounts, revise your spending habits, plan and plan again, talk, fight and then talk again. Get comfortable to touch the money-topic as often as you feel the urge to.
If you and your partner have a money problem and cannot see the way out of it, I recommend reading First Comes Love Then Comes Money by Bethany and Scott Palmer. So far, this is the best relationship-money book I’ve read. There you might actually learn that you don’t have a money problem, but a relationship one. They give you clear steps to work things out and regain the trust between the two you.
15. Fill The Glass Drop After Drop – Save Every Month – Even If It’s £5
This is a saving technique for families and people that really don’t have money. It takes a strong will to form this habit but it pays off with the time.
I mean REALLY DON’T HAVE MONEY. My craft overspending sounds like a Christmas shopping to this type of families. They don’t have money to overspend because everything that comes in goes out in a matter of days. The rest is survival.
If you are in a similar situation, I want to tell you I was there too. Back in 2010, I was working in a bank. One sunny morning my boss told me they downsize our department and I had to go as I was the last to enter the team. Harsh, but that’s the reality. I was providing the only regular money income for our family (my sister and my mum), and was responsible for paying the debts, the rent and paying for my university. At that moment I realised my money habits didn’t matter so much because my income was simply not enough.
However, there’s always something to do.
I found another job (in another bank) and from that point on, I decided to never get into a situation where I feel helpless about finances. At the same time, I created my own saving system that was working perfectly for years no matter if I had money or not.
I named it “the glass technique” and even my colleges adopted it and used it.
Imagine that every pound is a drop. One pound = one drop. Now, imagine a clear empty glass. If you let a few drops go into the glass it wouldn’t matter, would it? A drop or two are unnoticeable. But if you do it consistently, drop after drop, after a while, there will be a full sip inside this glass. If you continue to pour water in this glass, soon it will be half full or even full. You won’t notice the drops but they will do their job.
Every time I had to get paid from work I would move the little drops left in my account into another one and wouldn’t touch them. I could honestly say that these “drops” have paid off credit cards and loans in my family more than once. Drops matter. And I talk about £3 or £5. If it’s more – great. But don’t be ashamed to save the pennies.
16. Keep Searching – Read Personal Finance Books
Cultivating smart money habits takes time. However, maybe not all of them are suitable for you. Maybe you won’t feel comfortable with some of them even after a year.
Keep searching. Keep reading more financial books and pile up the knowledge.
If Kindle Unlimited is not your thing, or you don’t have the money to pay for it, go to the library. I guarantee you it will take you a while to go through all of the self-help books in there.
17. Be Actionable – Try different ways to manage your money until you find what works for you
Reading a thousand books won’t work for you unless you do.
Put everything into action and give it some time to see if it works for you.
Form the smart habit to try something new every three months until you stick to the perfect formula. Yes, there is a perfect formula for you, you just need to find it.
Trying new habits is a habit as well. Trust yourself that you will manage to do it and go for it.
18. A Life-Changing Skill – Stop Finding Excuses To Start Being Responsible With Your Money
“I won’t get paid my full salary this month”
“I’ve tried everything and nothing works for me.”
“I can’t save money and the best thing is to stop feeling guilty about it and start being happy”
Excuses, excuses, excuses. We all have an army of them in our pockets, ready to get them out and throw them in the others’ faces or swallow them so we could cure the guilt inside.
I am the same. However, lately, I try to notice every time I find an excuse not to do something. And then I do that thing not so much because I have to, but because I want to teach myself to stop making excuses. It’s one of the internal battles we all have.
“Your complaints, your drama, your victim mentality, your whining, your blaming, and all of your excuses have NEVER gotten you even a single step closer to your goals or dreams. Let go of your nonsense. Let go of the delusion that you DESERVE better and go EARN it! Today is a new day!”
Steve Maraboli, Unapologetically You: Reflections on Life and the Human Experience
19. Let Go Of What Doesn’t Serves You – Review your subscriptions every 3 months and cut some if needed
A simple but smart habit that could save you tons of money every year.
Step 1: Every three months find a few hours to sit down and check every single subscription you have. Gym memberships, phone bills, broadband and cable TV, car insurances and everything else that takes money from your account every month. Schedule from now the date to do it.
Step 2: Be honest with yourself – do you use it to the maximum? Do you really go to the gym a few times a week? Do you use all of your monthly data on the mobile phone? Is there a cheaper option for your car insurance? (ok, maybe the insurance should be reviewed on a yearly basis to avoid cancellation fees)
Step 3: Cancel or change the subscriptions that don’t answer your needs.
Step 4: Watch how you save.
20. Win More Time on This Earth – Remove unhealthy habits to save money
The last smart habit is more about learning to let go of unhealthy habits. It’s harder than developing or replacing it with a new one.
We are victims of habits, no surprise in that. But it doesn’t mean we cannot stop this at any time. All we need is a determination to do it long enough so it doesn’t cause us pain and discomfort.
Smoking, drinking too much alcohol and overeating are unhealthy habits we all know about. They cost us money and ruin our health.
But there are plenty of other things we do to ourselves every day and they affect our wellbeing.
- stressing too much is unhealthy and makes us spend money on anti-anxiety pills and counselling
- nail-biting = not hygienic, unappealing and causes dental issues like malocclusion of the anterior teeth
- eating too much red meat – it’s proven that excess eating of red meat increases the risk of colorectal cancer (something I know you don’t want to have), plus forget the money it costs you, it’s cancer!)
- being in a bad relationship – yep, it is unhealthy and it costs you money when going out or buying stuff for someone who doesn’t appreciate them.
- not exercising – not-doing something is a habit as well. The lack of physical activity will cause you health issues after years even if you feel ok right now.
What do you think about these 20 smart money habits? How many of them did you cultivate and how many you wish you had?
Sources mentioned in the article: