Instilling Positive Money Habits in your Life

Introduction
A positive mindset about money is essential to establish true financial happiness. How one thinks about money directly impacts everything from their money habits, to how much money they have to spend. There are many strategies to have in the tool belt to help instill a healthy money mentality, which in turn will help establish adequate money habits.
 
Create a Positive Money Mindset
First things first, no one is perfect when it comes to their personal finances. It is normal to miss a bill here or there, or maybe even miss a credit card payment. Those “mistakes” may feel like the end of the world at that moment, but it is important to not beat yourself up about it. Handling your finances with patience, and most importantly grace, can help set your bank account up for success. Money is always about mindset, and a strong mental foundation can help you change how you think about money. Instead of thinking, “I don’t make enough money” practice saying phrases like "I can adjust my spending to make the most of my income”. Most importantly, look at financial challenges as opportunities instead of roadblocks. An example of this would be finding a side hustle to generate more income, instead of wishing you made more money at your full time job.
 
Establish Healthy Habits
A budget mindset will allow you to have more positive thoughts about money. You have to remember that you are in control of the budget you make yourself, and the budget by no means controls you. Think about how a budget will allow you to have more structure and ultimately cash flow to offer more flexibility. Experts recommend you follow the 50/30/20 rule which is a monthly budgeting method that recommends you split your post-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings.
 
Another healthy habit would be taking the steps necessary to ensure you have a good credit score. This can be accomplished through limiting how often you apply for new accounts, making payments on time, and staying well below your credit limit. The credit score is a huge determining factor in whether you’ll be able to make large investments in the future or save for long-term goals. For instance, if you want to become a homeowner, you’ll need to know the appropriate credit score needed to buy a house and make sure you’re in good financial standing. Your credit score can directly impact whether you are approved for a loan and what your interest rate will be. Be careful when dealing with your credit, as the smallest mistakes can sometimes make an impact on your overall credit score. Also, get into the habit of keeping a close eye on all of your bank accounts. Make sure to thoroughly review every purchase, and check to make sure no unusual charges are present.
 
Expect The Unexpected
Life is unpredictable so having an extra cushion of money set aside will make everything easier and less stressful. This is why experts recommend that you set up an emergency fund. This fund should be about three to six months worth of expenses to account for the unexpected. This could be anything from a sudden car accident, medical expenses you didn’t account for, a natural disaster, etc. To have an emergency fund in place is a great asset, and offers some peace in mind in case something sudden springs up.
 
Conclusion
Financial “mistakes” are normal and necessary. These struggles allow you to learn how to establish good money habits. If you demonstrate good judgment while making financial decisions, it will pay off in the long run. Positive money habits can completely transform the money in your bank account, and be the reason that your life is more fruitful.