Though we like to think of ourselves as rational individuals when it comes to decision making, the truth is that we are creatures of habit. It simply takes too much willpower to constantly analyze and weigh the impact of every little decision we make on a daily basis. But depending on patterns of behavior isn’t necessarily a bad thing, as long as we have the right habits. To that end, today we’ve gathered together the 5 best habits you can form to ensure your long-term financial success.
Not only is fast food horrible for your health in the long-term, in the short-term it can cost you more than you think. Even a couple dollars a day adds up week after week, month after month, for what’s essentially an unhealthy and expensive addiction to fat and sugar. Get out of the habit of eating out and get in the habit of bringing your own healthy and affordable lunch to work each day.
This point can apply to any type of electronic, but is especially true for smartphones. Every major line of smartphone tends to replace its flagship product every year and a half to two years. And while it’s incredibly tempting to have the latest and greatest version, the actual improvements and innovation from one model to the next is virtually impossible to notice. If your smartphone is meeting all your current needs, then resist the urge to upgrade for as long as possible.
Credit cards are the bane of any financially stable household. The first problem is that it’s very tempting to buy things you don’t need with a credit card, and it gives you a sense of having more money than you actually do: after all, you can always just pay the bill off next month if you overspend. And that’s the second main issue with credit cards: it’s not unusual for APRs to max out at 29.99%. Not paying your bill in full each month will cost you interest, and if you’re only making the minimum monthly payment, you could end up paying hundreds or even thousands of dollars in interest over time.
If you’re keeping your credit cards because you’re worried about an emergency hitting, know that there are other lending options like installment loans out there that won’t tempt you to spend money you don’t have on things you don’t need.
This can be a difficult habit to form, but it is one of the most important for your financial well-being. Instead of thinking about financial decisions in the short-term (I want that shirt.), think of them in the long-term (How many times will I actually wear that shirt if I buy it?). Getting into the habit of weighing your financial decisions by this metric will help maximize your financial health both now and in the future.
Part of thinking ahead is putting money either into savings or investments. We tend to think of putting money in savings as a conscious act, but in today’s digital age you can automate the process so a given amount is taken out of your paycheck each month. Again, by removing the human factor from the equation, it is nearly impossible to sabotage your success.