Success is all about developing habits that ultimately make you the person you need to be to crush your goals. Financially, you’ll need to develop ‘money habits’ to contribute to your financial success.
Here are 6 money habits you can develop to survive a recession.
#1 – Be Conscious of Your Money Spending
Money habit number 1 is to be conscious of where your money goes at all times.
Having a clear understanding of how you spend your money provides you with an advantage from the average joe.
This habit allows you budget your money accordingly and has plenty of financial benefits! Some benefits include:
- Paying bills on time – resulting in a great credit score
- Budgeting skills needed to diversify your income
- Avoiding overdraft and late fees
Self control is a big key to being money conscious.
You can stay organized by using an app such as Mint. The app keeps all your accounts in tack and also provides you with your net worth based on your open accounts.
You can keep tracking of your spending by logging into your bank account quite frequently and keeping tabs on your balance.
Learn to budget
If you aren’t budgeting, chances are you’re most likely going paycheck to paycheck from time to time.
The secret to stop living paycheck to paycheck is to be money conscious of where your income is going.
This money habit is going to allow you to manage all type of money whether it’s $2K a month or $10K a month.
Learn this financial skill and you will never be broke.
#2 – Staying Out of Big Debt
Money habit number 2 is knowing how to stay out of big debt.
Big debt includes things such as car loans, home loans, student loans, and massive credit card debt.
Knowing how to tread these waters without getting into debt is a great skill you can develop to win financially.
Transportation without debt
Buy a vehicle using cash.
If it gets you from point A to point B then it’s good enough. Set a budget to spend anywhere from $2.5K-$6K on a car that you won’t owe any monthly payments on.
As your money grows, you can keep upgrading using cash to stay out of getting into a 5 or 6 year car loan.
Housing without debt
While most people might think renting is a waste of money, renting can actually be a great tool to build your finances.
Renting provides you with flexibility to move out at any time. Plus, you aren’t required to put a hefty down payment for housing. By renting you’re also eliminating the six figure debt mark.
Unless you’re older and are considering settling, buying a home could be for you. Otherwise, here are some ways you can make the most out of renting:
- Keep your expenses low to make the most out of your rent
- Increase your income each year while renting in the same home (also known as living below your means)
- Payoff debt
- Save a ton of money
You can use renting as a platform to secure your financial future. You can payoff debt and save a ton of cash to invest, or for a down payment on a home when you’re ready for that move.
Rent is only a waste of money when you don’t set financial goals.
Education without debt
Before you take up a loan for your education, be sure you know exactly what ladder you’re climbing up. The last thing you’d want to realize is you’ve been climbing the wrong ladder, you look down, and climb the correct one again.
Avoid opening several accounts with the department of education.
Ask yourself if you the career you’re looking to get into requires a degree or not.
If your dream is to build startups and own your own company, no you do not need a business degree. A business degree will only set you back, believe me..
If you plan on working for a massive company and leading from the top then yes a business degree is required.
Look into take courses that can help you achieve your career goals. You can take courses in billing and finance, medical, and copy writing that you can pay for as you go.
Use Fiverr to gain knowledge from experts!
#3 – Implementing Minimalism
Minimalism is living off of less.
In other words, it’s about learning to live below your means.
This money habit allows us to simplify our lives and rid ourselves of the clutter.
How can we become minimalists?
Some ways you can minimalize include:
- Resisting the urge to fill every square footage at home with décor
- Learning to storage and organize precisely
- Getting rid of unused / shelved items that have no purpose
- Avoiding a hoarding lifestyle
This lifestyle is also a money habit that is developed through budgeting, saving, and proper value assessment.
Minimalists look at the personal value of things oppose to having material things just to have them.
If it does not bring value to our lives then we dispose of them.
#4 – Side Hustling
Side hustling is a great way to develop your money habits. It allows you to increase your financial confidence.
Financial confidence is that drive that allows you to make money no matter your circumstances.
When your financial confidence is high, you can survive a recession because you know how to do sales, you know how to create cashflow for your family.
Side hustles are important because they enable you create another stream of income.
When you learn to create multiple streams of income for yourself, you begin to increase your income.
This is how the highly successful people earn a lot of money and begin to develop entrepreneurial skills to scale their startups.
#5 – Build an Emergency Fund
One of the best money habits you can have is the skill to successful save money.
Use this skill to build a hefty emergency fund to protect you and your family during a rainy day.
We compiled an awesome list on 10 successful ways to save money here.
You are winning financially if you have a good 3-6 months worth of monthly expenses put away, more so if it’s beyond that!
If you have debt to payoff, tackle a simpler goal like saving $1,000.00 as a backup for an unexpected expense.
Where should I keep my emergency fund?
The best place to keep an emergency fund is somewhere you won’t touch it. But not just somewhere you won’t touch it, you’ll want it to earn interest for you rather than collect dust in an average bank.
Put your big emergency fund money in a high yielding savings account that will compound interest with time. The interest rate should yield monthly earnings and keep up with inflation at the very least.
It would be wise to set a small amount of money in a personal savings account to have liquid should you need to pull money out immediately.
#6 – Set Financial Goals
Last but not least, money habit number 6 is to set financial goals.
If you weren’t thinking of setting financial goals you wouldn’t be here. So thank you for being here, for you.
All your financial achievements will derive from simple planning and goal setting.
Whether you’re looking to be debt-free, start your first investments, or learn how to budget, Franknez.com is going to help you set these financial goals so you can become financially successful.
How are people meeting financial goals?
Financial goals are the reasons we’re able to purchase our first home, grow our net worth, send our kids to college, and to start our startups.
We are able to meet our financial goals by developing great money habits that allow us to focus on manifesting our dreams into reality!
It starts with putting in the work to generate income then saving it and learning how to diversify it.
Can anyone really learn these money habits?
Money habits are just that, habits! A habit becomes a habit after a prolonged period of time of consistently doing something.
Anyone can develop these money habits, all you have to do is really want it and begin to set financial goals for yourself.