11 Money Habits That Will Change Your Finances & Life

I preach for personal finance education at school. All the time. I can't remember the number of conversations I had with friends and family about this subject. Personal finance habits can make or break you, no matter how much you earn.

By managing your money wisely-and the sooner you start, the better you can set yourself up for financial success even if you're currently living on a tight budget. I truly believe that money management is a crucial skill to have for anyone wanting to better themselves or their situation in the long term.

I'm the kind of girl who always wants the best and doesn't want to miss out on anything that could be good for her. And that includes finding the best deals and the smartest way of doing things. I'm a born saver, frugal spender, and smart money manager (Hey, I'm not bragging!); and I'm always on the lookout for any trick that could benefit me financially.

So without further ado, here are my top money tips and what I believe could be life changing 11 money habits to adopt:

Change Your Money Mindset

Adopt a more positive money mindset. Out of all these tips, if I could pick just one and only one, it would be this. It is ultimately, the setting stone for all the other financial habits you may develop.

We grew up being told that if you want to travel the world or live in a mansion you have to be a millionaire or a CEO, otherwise, it was just as well not to dream. That the only sure and stable way to make money is to have a college degree and a 9 to 5 job, otherwise you've got no chance.

These are the kind of limiting beliefs that hurt your money mindset, to the extent where you don't see the point in following your passions or shooting for the stars and saving or spending wisely, because hey, you're not a millionaire so you'll not make it anyway, what's the point in trying right?!

Changing your money mindset, throwing away all the rules, and getting rid of the limiting beliefs is the first step you need to take if you want to better your financial situation.

To get to Rome, there isn't only one road. In the same spirit, there are hundreds of ways, if not thousands you can make your dreams come true even if you're not a CEO or making five figures per month.

Set Specific Financial Goals

Having financial goals is crucial because it keeps you motivated to keep working and saving to achieve what you want.

There is no size fits all when it comes to financial goals. Yours might be to pay your student's debts by 30, another's would be to buy a house by 35 or retire by 40. Be aware of not comparing your financial goals to those of others. That's also a negative money mindset that will hinder your success.

Set a financial goal, make an inventory of your financial circumstances then start planning.

Let's say your goal is to buy a house by 30. Do your maths first: how many years and months do you have left till 30? How much does your dream house in your wanted location costs? What can you compromise on? What monthly expenses can you get rid of?

Calculate how much you'll need to set aside monthly to reach that goal, and if your salary or monthly expenses don't allow you to save that much, get creative.

Can you take on a side hustle? Or a second maybe part-time and at home job? Something flexible that you can pick up whenever you're free to attain that monthly amount needed to be saved? Or maybe you can even start a home business with zero dollars that could serve as passive income?

If you need inspiration, check out the posts below for some ideas:

• 20 Side Hustles That Are Worth Your Time.

• 9 Flexible & High Paying Work At Home Jobs.

• 8 Home Businesses You Can Start With No Money.

Create A Budget

Monthly and annual budgets. You need to have them and you need to stick to them!! It's one of the most simple strategies you can set up to start your financial planning.

When you have a budget, you have established spending limits. This makes you less inclined to step overboard and spend more money than needed.

If you have no idea where or how to start budgeting, don't worry. There are so many free apps and websites that make this process very easy even for beginners. Most of them don't just assist you in creating a budget but also help you stay on track.

Check Your Credit Score

Checking your credit score and report keeps you in check.

This is like a mantra I live by financially. Bonus: it rhymes so it's easy to remember!!

Try to build the habit of regularly checking your credit reports and score; this is essential in helping you make better financial decisions and improve your financial situation.

How? Well, if you don't know the importance of keeping a good credit score then you probably need to start taking this action asap.

A good credit score helps you in:

• Getting lower interest rates on credit cards and loans.

• Getting lower insurance rates.

• Having no security deposits on utilities

• Getting approved for loans more easily

• Getting a higher chance of approval for rental houses (+more easily).

• Having higher limits on loans and credit cards.

By checking your score, you start being aware of what kind of financial decisions and habits are hurting your score and you can remedy that to keep a good score and save up on many things.

This is something you can do for free online with even some extra help!!

My two favorite apps (both free):

• Borowell (for those living in Canada): on top of free credit score, monitoring, and weekly updates and reports, you can get access to an AL-powered credit coach who will help you keep a great score with constant tips and tricks, both general and also based on your profile. You also can get matched with the best and most optimized financial products for your financial profile, whether it's a credit card, a loan, or something else.

• Credit Karma: similar in the sense that it offers you free credit score and monitoring along with finding personalized offers for you that fit you and that you are eligible for.

These free apps can save you both time and help you find the best deal so I strongly advise you to start making use of them or something similar.

Repeat after me: checking my credit score keeps me in check. Remember this and you're good to go.

Save. Save. Save

The sooner you start saving money, the sooner you can get rewarded; The secret here is to change your mindset when it comes to saving. Your savings don't have to be huge, and neither do you have to deprive yourself of the things you enjoy. It's as simple as making smarter choices when choosing between options A and B.

Decide on what is most essential to you, and what you can compromise on. If you hate commuting and you would prefer to own your car, don't force yourself, focus your saving plan on something else that you don't care for, such as clothes shopping or entertainment.

Pay Off Your Bills On Time

An extremely important habit to build since not paying your bills on time quickly destroys your credit score which will make it harder for you to rent and so in the future.

More importantly, people who don't pay their bills on time tend to easily spend that bill money on something else, having to resort in the end to going through their savings to pay that bill because they spent their salary on frivolous things.

It's definitely a good idea to use an app that automates the entire process for you so that you don't even have to remember.

Understand Your Taxes

Not the most fun thing to do, but if you could spend a few minutes on the net trying to understand your taxes better, you can be sure that it's a knowledge that will be helpful to you for a lifetime

Forget Impulse Shopping

Whether it's grocery shopping or shopping for clothes, I never do that. It comes easy to me because I'm an impulsive planner and control freak.

To make it easier for you, try to always keep a list on hand of what you need or want; It could be a weekly or monthly list, but whenever you feel the urge to go for impulse shopping, just take out this list and take a look at it for a quick reminder of your priorities.

Something else that I find to be supremely helpful, is to actually set a monthly amount of money specifically for impulse shopping. This means that if I feel the urge to buy something "just because" I know I have a certain budget for it, and I'm not allowed to go over.

Start An Emergency Fund

Again, not a fun subject for most, but if you keep in perspective what happened with the 2020 pandemic, I think it's safe to say that everyone may need an emergency fund one day or the other in their lives.

So go ahead and set up your emergency fund with a minimum of 3 months worth of living expenses saved up I'd say. Regardless of the practical side of it, this will also save you peace of mind and sanity in times of crisis where pressure and stress are running high.

Be Smart About How You Use Your Credits Cards

When used wisely credit cards have definitely great perks: they help with your credit score and are safer than cash in most situations, that is until you abuse them. If you abuse your use of credit cards they can ruin your financial future.

I recommend not using many credit cards and definitely not using them for small and unimportant stuff, like buying a cup of coffee!! Always carry some cash with you for things like that.

This may be a common piece of advice, but unfortunately, most people don't follow it.

Make Your Coffee At Home

Speaking about coffee, starting to cook and make your coffee at home can have a huge impact on your money savings. Why? Because, a lot, and I mean a lot of people spend so much money on coffee drinks; It's easy to say oh it's only five dollars, but when this becomes a habit, the five dollars quickly add up.

So wake up 10 min earlier, it really doesn't make a difference, and make yourself a quick cup of coffee. Those 10 minutes can save you actually up to $150 per month.

You can still enjoy your Starbucks cup of coffee from time to time, just don't make it a daily habit.

So there you have, simple, basic but essential money habits that impact your finances and can change your life!!