8 Must Break Financial Habits to Simplify Your Finances

Which one of your financial habits do you wish you could break?  We all have habits we have developed over time.  Some habits we develop prevent us from living the financial life we desire or reaching the financial goals we set.

Here are 8 financial habits you must break in order to help you achieve your financial goals and objectives as well as begin to live a simplified financial lifestyle.

Bad habit #1 Not creating a monthly budget – You must know where your money comes from and where your money is spent on a monthly basis.  This way your not wondering at the end of the month where did my money go or why I do not have any money left at the end of the month to save.

Bad habit #2 Not creating an emergency fund
– You just never know when financial emergency will occur.  By not having an emergency fund you can set yourself up for financial disaster.

Bad habit #3 Making only the minimum credit card payment – If you want to get out of financial debt and your only making the minimum payment you will never get out of debt.  You might as well just stop using your credit card if you can not make more than the minimum monthly payment.

Bad habit #4 Paying your bills late – If you find yourself always incurring late fees every month, you need to look to see why your incurring these fees.  Paying your bills late can significantly impact your credit score which can impact your ability to borrow money or increase your cost to borrow money.

Bad habit #5 Using store credit cards -
If you sign up for those store credit cards just to receive the 10% to 20% discount on your recent purchase, is it really worth the money you save in the long run.  These credit cards usually have high interest rates and most can only be used at that individual store.  Its also one more bill to keep track of and one more bill to pay at the end of the month. Just say no to those store credit card offers.

Bad habit #6 Not checking your credit report regularly – Most of us only check our credit report usually when we are going to make a large purchase such as house or car if you even check it then.  Many times we don’t look at our credit reports unless there is a problem such as we were denied credit because of an issue on our credit report and then find out it was a mistake.  If you check your credit report at least annually you can prevent these issues from arising.  Know where you stand when applying for credit so your able to dispute any discrepancies prior to making an application for credit.

Bad habit #7 Living for today only – Many times we only live for today not for our future. How we spend and what you save impacts how we will live in the future.  We don’t know what the future holds but we can help predict your future a little better by planning for it and taking action now.  Not saving for retirement today will impact you later in life.  You look back and say if I only would have saved a little more I could be living a better life.  You must plan for your future financial life so it can be better or just as good as the life your living now.

Bad Habit #8 Stop trying to be a financial do-it-yourselfer – We all have the Home Depot mentality. I can do it and save myself some money or I can do it better than the expert.  Think about how much time will you spend trying to learn the new tax laws or researching stocks to add to your portfolio. Hire the expert you will save time and money by letting the expert handle your specific financial task.

What are some other financial habits you have that you would like to break to help simplify your financial life?

Take Control of Your Financial Life Starting Now!

Are your personal finances a leading cause of stress in your life? Are you spending more time sorting through your personal finances than enjoying life? Are you tired of paying late fees or overdraft fees but don’t have enough time in the day to keep up with your personal finances?

Many times we create this unnecessary stress in our lives because we make our personal finances more complicated then they should be. Managing your personal finances can be as simple as you want them to be if you design your finances around the lifestyle you want to live. You can not just wave a magic wand and it will all be fixed. You will have to develop a plan to simplify your personal finances.

Where do I begin to simplify my finances? Here are some steps to get you started on your way to financial simplicity.

* Must first start with yourself in mind. You have created your current financial situation. So here is your opportunity to change it. Look at yourself and ask what do I want my personal financial life to look like in the future. Make a list of what you consider to be the ideal or perfect personal financial life. Take this opportunity to dream. Its your life you can do what ever you want. (Remember anything is possible if you put your mind to it.)

* Determine what are your personal financial objectives? Do you want to reduce your current debt; begin to save for retirement; have better cashflow; start college savings; start an emergency fund or purchase your first home. By determining what is important to you financially, this helps you establish your starting point.

* Write down your financial goals
which incorporate how you’re going to achieve your dream financial life which was established in step 1 as well as help you achieve what is financially important to you in step 2. You want to establish specific achievable goals which have real time deadlines. Such as I want to have all my bills paid by the 15th of each month or I want to pay off my credit card balance at the end of each month. By setting specific goals, they are more attainable.

* Perform a self assessment of your current financial situation
to determine where you are compared to your dream financial life and what needs to be done to get there.

By following these steps you have now established a foundation to build your simple financial lifestyle upon. When simplifying make sure you are incorporating these principles you have established.

Remember financial simplicity is much easier to manage and causes less stress so take action to simplify your finances.

If you would like more tips to help you simplify your personal finances make sure you subscribe to simple financial lifestyle email newsletter and subscribe to RSS feed for blog updates.