With most people now choosing to shop online, there has been a steep rise in the average amount people spend. Not to mention, the enticing offers and discounts give shoppers another reason to pull out their credit cards. Does this sound like you? This post is intended to instill in you some money habits that will help you save more for the future.
Here are the 6 money habits that will help you make more savings this year
1) Don’t spend more than 40% of your income
I know it’s easier said than done but unless you have massive student loans to pay off, you don’t want to spend more than 40% of your monthly income. Most people, particularly teenagers, spend almost 90% of their income on silly things like food, flashy items, video games, etc. If this sounds like you, it’s time to stop this habit and think long term.
2) Invest your earnings in a Certificate of Deposit (CD)
If you are worried about losing all your savings by spending them on silly impulsive purchases, opening a Certificate of Deposit (CD) might be a great option for you. Bear in mind that once you make a lump-sum deposit in a CD, you cannot withdraw the amount until the term ends. If you attempt to withdraw, the bank or the credit union will charge a heavy early withdrawal penalty(EWPs).
3) Try not to carry a balance on your credit card
When you purchase with your credit card, the amount adds up to the existing credit card balance. You are required to pay off a certain percentage each month to avoid any interest. It is far better to pay off the entire balance if you can.
4) Start a small business
Starting a business is one of the best things you can do with your money. If you don’t have enough money saved up to buy a brick and mortar store, try learning a skill like programming, digital marketing, graphic design, etc. There are several freelance platforms available that will let you sell your services.
5) Don’t buy things to impress the people you don’t like
This infamous line from the movie “Fight Club” has a very strong message for people who can’t stop caring what others think of them. It’s time you stopped impressing people who have nothing to do with you and learn to live comfortably within your means.
6) Reframe your mind
Reframing is a powerful Neuro-Linguistic Programming (NLP) technique. Proven effective in treating drug addicts and pathological liars, it can also be used to let go of the bad money habits you acquired from your friends and family. Most middle-class families are not financially savvy. They think more in terms of their short term needs than anything else. So, reframe your mind by reading books, learning positive psychology and hanging out with successful people.
It doesn’t cost much money to live a happy and satisfied life. Most people indulge in reckless spending habits as a result of an inner void. They feel empty and dissatisfied all the time. It’s time you recognize your unconscious habits and begin cultivating new positive ones.