5 Financial Habits That Will Improve Your Life

By Angela Monroe - February 28, 2020

Do you have bad credit? Want to know some life-changing financial habits that you can apply quickly and easily to your life? Read these financial tips to improve life and finances.

Setting financial habits is the key to improving your life, raising your credit score and getting yourself on the right track long term. It often doesn’t take a huge amount to change the way you operate your finances, and you’ll see a big difference relatively quickly. Always try to stick with the changes to allow them to become habits, even if you find them difficult at first.

1. Always live within your means

It sounds simple but lots of people end up with bad credit simply because they don’t live within their means. Actually figuring out how much you can feasibly spend each month is one of the life-changing financial habits that can set you on the best financial pathway.

You’ll need a certain amount of discipline to resist the temptation to spend money on things you can’t afford- especially at certain times of the year or with advertisers trying to get you to buy products that you really want.

Before every purchase, think seriously about whether you really need to spend the money and if you’re not 100% convinced, don’t go ahead. If you can’t pay back a purchase, you could be risking your credit rating further by defaulting on a loan or making late payments.

In order to understand what living within your means actually involves, it’s useful to create a budget. Be as honest as possible in writing down exactly what you have as an income each month, and where your outgoing costs are. If you’re spending more than you earn, you’re most likely going to end up with bad credit and could be in need of life-changing financial habits.

2. Set yourself goals

Think about the short term, medium-term and long term when it comes to setting goals. What do you want to achieve financially and how do you envisage spending your money in years to come? Lots of people dream about a retirement home or buying a new car – but setting financial goals can help make these become a reality.

Setting financial goals is really important if you have bad credit. It can be a great way to motivate yourself to get back on track financially. Your primary concern may be improving your credit rating – this will help you to get better rates of interest and increase your chances of future loans being approved.

Make sure you don’t have goals that are too vague. Calculate exactly how much you want to save and put a time limit for yourself on this. You can then figure out how to achieve your financial goals and have a greater chance of success.

3. Don’t forget to save

If you’ve got bad credit you might see saving money as fairly low on your list of priorities – underneath paying back loans and dealing with day to day expenses. Yet saving is a life-changing financial habit, which you can quickly get into with some small adjustments to your financial behaviour.

You don’t have to save a huge amount each month. If you’ve got bad credit, it may be that you can only spare a few dollars a week – don’t worry, this will soon add up. Lots of successful people try to save 20% of their income so this could be your eventual goal once you’ve got things back on track.

Look at your budget to see where you can make savings, and open a savings account so that the money won’t be readily available to you once you’ve set it aside. Once you’ve got a savings account, you’ll have the peace of mind that you’ve got a safety net in the event of an emergency and won’t end up having to get short term expensive loans.

4. Consider investing money

Again, if you’ve got bad credit and are currently struggling to make ends meet, investing money might not be in your radar. It’s important though to have it in the bigger picture for when your finances improve and you may be in a position to make money from your money.

Investing money is more of a long term approach so you shouldn’t expect instant results, yet it could really help increase your savings over the years. It’s become a lot easier in recent years to invest your money online with the help of inexpensive advisors and products. Be cautious though about where you invest and always get expert advice to help you make the right decisions.

5. Ask for advice and help

Having bad credit and trying to deal with difficult finances can be stressful and daunting. It’s really important that you don’t bury your head in the sand. There are so many people out there who can help you to improve your life with great financial habits and small changes that you’ll enjoy day today.

If you’re keen to self learn, there are some great books about getting yourself into good financial habits as well as videos and articles online. Always be open to learning as much as possible about the potential for improving your bad credit and adopting life-changing financial habits.

Finding a good financial advisor who you fully trust can be an excellent idea when it comes to getting advice and practical help with your finances. You’ll want to make sure that they aren’t getting commission from selling products to you so try to ensure that they are fee-only rather than fee-based.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.


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