Submitted by Rachel R on Mon, 09/08/2014 - 1:29pm
Good money habits can be life changing
Image source: Flickr user espensorvik
The world is full of money advice, money gurus, get-rich-quick schemes and mumbo jumbo about cash that often either doesn't make sense or doesn't seem to apply to your situation. Because we deal with people here in our offices every day from all walks of life, we see what money practices cause problems and how people are able to recover and get on with their lives. Below are five amazing money habits that apply to everyone at any age, stage of life, occupation or financial situation.
#1 Spend more time, less money
You should understand what makes life good and it's not money. As long as you have enough to keep a roof over your head and food in your belly, it's okay if it's not a mansion and lobster. What will matter to your loved ones is the time you spend with them. Play with your kids, hang out with your spouse, spend time with your extended family. It's okay if you can't afford a trip to Disneyland – time spent playing board games is just as meaningful, if not more so. Stuff doesn't make anyone happy.
#2 Treat credit card debt as poison
Credit card debt is one of the highest interest types of debt. When you swipe a card for something you can't afford, you're effectively taking out a high interest loan. If you can't pay off your credit card debt each month, you're tanking yourself financially. Store cards are even worse because their interest rates are even higher than traditional credit cards. Get one or two cards with the best possible interest rates, no annual fees, use sparingly and pay off in full each month. Don't deviate from this ever.
#3 Live below your means
This one is a big one. Just because you can afford a bigger house or newer car doesn't mean you should buy one. Billionaire Warren Buffett still lives in the first house he bought for $31,500 back in the day. Things change and your money may not always be so flush. If you put yourself in a position where you are debt spending on credit cards to get by or just barely paying your bills and you have an income dip, you'll be in trouble. Live below your means and you'll always be financially secure.
#4 Learn to love leftovers
Food is the third biggest part of our household budget and we waste $350-$575 of food per person through poor management. Eating out is even costlier. If you don't know how to cook, learn and then learn to love your leftovers. Make lunches for your kids for school and take leftovers with you to work. This will add hundreds of dollars back into your monthly budget and several thousand over the course of the year. At the end of your life, you won't regret not going out for pizza.
#5 Protect your family and your retirement
This is about big picture thinking for when you're older and when you've passed on and left your family. The two tools to help with this are 401(k) and life insurance. If your employer offers a 401(k) match, contribute enough to max it out. It's free retirement money. And try to max out your 401(k) contributions each year. If you have kids, take out life insurance on you and your spouse to see them through in case anything should happen. Term or universal life are affordable and practical options.
These practical tips will work even if you're already in debt and struggling. If you are having money issues and are neck deep in debt, resetting with a clean financial slate can be the best foundation to build these practices on – and Chapter 7 or 13 bankruptcy may be able to help. Contact the law offices of John T Orcutt to find out how you can get the fresh start you deserve.
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