3 Simple Money Habits to Start Now!
Wealth building is all about habits but as we know, money can provoke a lot of anxiety, especially if we feel we don’t have control over it.
These 3 simple money habits are important to building wealth and taking control over your finances.
1. Routinely check your finances.
Part of habit building is scheduling things on a calendar. We are more likely to stick to our goals if we schedule them in a calendar because that time in our day automatically becomes reserved making it harder to come up with an excuse. Productive is an app that allows you to plan and track your habits.
Checking your finances is simple if you use a money app such as Mint or Personal Capital. These apps link to all of your accounts and show you all of your transactions, spending categories, and unusual patterns such as over-spending on one category compared to your history of spending. It also tracks spending over time allowing you to see how much you spent every month and how that compares to previous months. You can set up budget amounts within each category and receive an email alert letting you know when you are approaching your limit and also see reminders of upcoming bills.
These apps also allow you to track your net worth by automatically deducting your total debt from the total value of your assets (bank accounts, home mortgage, current value of cars owned, retirement accounts, etc.) Furthermore, they allow you to stay on track of your credit score for free.
Checking in for a few minutes every week allows you to stay on track of your finances and keep an out for anything that appears unusual in your accounts such as transactions you did not make.
2. Automate your finances.
As we have mentioned before, automation is a major key to wealth building! Automating means less energy your brain needs to weigh out options that may be influenced by situations or emotions. Therefore, automating is a process that eliminates the ability to have your emotions influence your decisions. Also, by automatically putting money aside, you are forced to save and spend what is left versus spending and then saving what is left.
Build an emergency fund by automatically having a set amount of money go into a separate savings account every paycheck. Do the same for retirement accounts and investment accounts. Starting with smaller investment accounts such as Acorns, an app that invests your spare change, can help you feel motivated to invest more over time. Another option is Qapital, an app that allows you to save your spare change for specific goals such as a vacation.
Then, enroll in Autopay for all of your bills, and set monthly reminders in your calendar so you know when each bill is coming out of your account. Doing this will ensure you don’t miss a payment.
To learn more about the power of automation, we recommend reading The Automatic Millionaire by David Bach.
For more recommendations check out our previous post on 5 books that can change your life.
3. Schedule a weekly side hustle.
There is a lot of risk in having just one stream of income. If you lose your job, you have nothing to fall back on making it a lot harder to become wealthy. The rich have additional streams of income, such as side jobs or passive income from their investments. There are many side jobs you can do with just a few hours a week.
Here are a few examples :
Driving for Uber or Lyft
Freelance work (writing, editing, graphic design)
Baking for special events
Cooking for catered parties
Selling crafts on Etsy
Write down a list of things you enjoy and are good at, then think about what kind of weekly side jobs you can find with those skills and interests.