Improving your financial situation may seem as easy as saving more money and decreasing your expenses.
But here’s the thing: if you want to see long-term improvements, you’ve got to first establish some good financial habits. This will help you both get on the right track and achieve your money goals.
Financial habits are really no different from other types of habits. If your habits are enjoyable and require less effort, you’ll have a better chance of actually sticking to them. For example, if creating a budget and checking on it every day doesn’t get your juices flowing, you’ll likely give it up after a few weeks. This is why you’ve got to find a way to make your financial habits stick.
To help you keep your finances on track, check out these 5 creative habits that you can start using right now.
1. Put a reminder in your wallet to avoid unnecessary spending
Spending money isn’t just a financial decision. It can sometimes be an emotional decision as well. For example, when was the last time you went grocery shopping and only bought what was on your shopping list? If you’re like many people, you bought things you didn’t really need, like a box of your favorite gourmet cookies or an extra pint of ice cream.
To avoid unnecessary spending, try writing yourself a note and sticking in your wallet as a reminder. This note can even offer up an inspirational quote from Benjamin Franklin: “Beware of little expenses; a small leak will sink a great ship.”
You can even try to have fun with this. For example, one Twitter user keeps a picture of Terry Crews in his wallet to remind him of the actor’s frugal character in the TV show “Everybody Hates Chris.” A woman even received permission from the actor to use the picture on her personalized debit card.
Whatever you choose to do, make sure that it’s effective. If you find that you’re starting to brush the reminder to the side or ignore it completely, create a new reminder that will make you think twice about overspending.
2. Think about how long it took to earn your money
If you have $500 in your checking account at the end of the month, you probably take the balance at face value.
But, what if you think of it in terms of: how long it took to earn that $500? For example, let’s say you earn $15 an hour at your job, or $120 a day. Taking tax withholdings and other deductions into consideration, your take-home pay per day may be closer to $80.
With that in mind, it took you about 50 hours to earn that $500. If you think about it this way, you may be less willing to spend that money on something you don’t need.
As an example, say you want to buy a $500 television to replace one that still works. With your new money and time mindset, you’ll need to determine if the TV is worth the money as well as whether it’s worth the amount of time it took to earn that money.
3. Decrease your take-home pay
We’re not suggesting you should earn less money. Instead, it’s a wise idea to automate your finances so that you can actually grow your savings. This includes paying yourself first every month.
For example, why not set up a savings plan in your checking account so that a portion of your paycheck goes to your savings – automatically? Chime Bank offers this feature and this way you don’t have to do it yourself. With its Automatic Savings program, Chime will transfer a percentage of every paycheck directly into your savings account.
Note: If you’re looking for guidance, make sure to check out our “How Much of My Paycheck Should I Save” blog post.
4. Sell your stuff
We all collect things over time that we stop using after a while. You can continue to allow your stuff to collect dust in your storage area, or you sell it online and turn your clutter into cash.
For starters, get a cardboard box and put it in your storage area or garage. Then, whenever you find something that you’re not using anymore, put it in the box. Then, once a month or so, sell the contents on Craigslist, Ebay, a Facebook yard sale or any number or apps like OfferUp and LetGo
If you’re hesitant to sell something because you think you might use it in the future, be honest with yourself. If the item has gone unused for months, or even years, it’s likely that you can do without it.
5. ‘Treat yo self’
If you’re a fan of the TV show “Parks and Recreation,” you probably enjoy the episodes where Donna and Tom celebrate “Treat Yo Self Day.” On this day, the two co-workers spend the whole day on self-care, buying whatever suits their fancy.
Obviously, this level of spending can easily deflate your budget. But, a pretend spending holiday can still be a good reminder that it’s ok to reward yourself with some extra money each month.
So, why not create a “Treat Yo Self” fund. Earmark some money into this fun fund each month and this way you can spend it all every month or save up for something bigger.
The important thing here is that you allow yourself the opportunity to spend money so you don’t feel deprived. This way you’ll be more apt to remain disciplined in other financial areas, such as contributing to your emergency fund, building your retirement savings and saving for a down payment on a house.
The bottom line
As outlined above, if you want to improve your financial situation, the best thing you can do is to start developing good financial habits. An added perk: you may actually have fun keeping your finances in check.
Keep in mind that as you discover what works best for you, your new creative habits will also help you reach your money goals faster. Are you ready to try out some new financial habits? We thought so!