How to Build Good Money Habits that Actually Last

February 19th, 2023

6 min read

Have you ever wondered what it would take to make a lasting financial impact on your life? While it’s easy to talk about the importance of budgeting and saving money, it’s another thing entirely to develop good money habits that will leave a lasting impression on your finances. Thankfully, it doesn’t have to be as complicated as it seems. By instituting just seven simple money habits into your life, you can ensure that you’re making the most out of your hard-earned money and setting yourself up for a more financially stable future.

Seven Money Habits for a Lasting Impact

From budgeting to investing, these seven money habits will help you make a lasting financial impact on your life.

1. Analyse Your Budget to See What’s Left Over

The first step towards making a lasting financial impact is looking at your budget and analysing how much extra money you have. An idea of how much money is left from your budget gives you an overview of your spending habits. With this, you can then learn where to make adjustments or maybe look at possible investments. You should know what is going on with your finances to make the best possible decisions.

Use a Home Budget Analysis Calculator

A Home Budget Analysis Calculator helps you control your budget and to determine where your money is going. All you have to do is enter your income and monthly expenditures, and then you will see how much you have left to save and where you spend your money.

2. Automate Your Finances

Another important step towards making a lasting financial impact is automating your finances. Keeping track of your expenses as they come in can be beneficial. By setting up automatic transfers from your paycheque to your investment accounts, bills, and savings accounts, you can take the control out of your hands and out of sight. This way, you don’t have to worry about paying your bills or ensuring you have the money to invest. It removes the human error factor and helps you ensure your finances are in order without worrying about it.

Creditor or Service Provider

You can ask your creditor or service provider to deduct their payment from your bank account automatically. The transaction is processed periodically based on the payment schedule you have with them.

3. Automate Your Savings

Along with automating your finances, you should also automate your savings. Having a savings account is important, but having an automated one is even more important. By doing this, you’ll ensure that you’re putting a certain amount of money away from each paycheque and depositing it into your savings account. This will help you save for future expenses like retirement and unexpected expenses like car repairs or medical bills.

According to Forbes, here are some ways to automate your savings:

Paycheque

If you have a goal that you want to achieve with your savings, you should set up a plan to put some of your money in a retirement savings plan or cash savings account. Make sure to do this before your paycheque hits your bank account.

Automatic Savings Tool

Aside from automatically doing your savings for you, some of these round-up apps or automatic savings tools save your spare change by “rounding up” the amounts from everyday purchases. This helpful feature rounds up your daily transactions to the nearest $1 amount, sending that loose change directly to your savings account.

An example is if you used your debit card to buy a meal for $19.20, it would increase the value to an even $20. The round-up sends that extra 80 cents to your account to contribute to your savings.

Banks in Australia that do this include Ubank and Suncorp.

Boost Savings

It would be best if you were strict with putting that extra money in savings if you are committed to cutting your monthly spending. Be motivated to automatically transfer money to your savings with the amount you plan on cutting from your spending. It would help to stay within that range unless you plan to deposit more money.

Sudden Windfall

A one-time financial windfall constitutes a sudden massive amount of money that suddenly comes onto your lap. Inheritance is an example. With this, it might feel a little overwhelming and exciting to splurge on a major purchase. However, the first step is to always think about it and maybe consider putting the money in your savings.

High-Interest Savings Account

One of Forbes's huge points is to maximise your savings by opting to put your money in the best high-interest savings accounts. Usually, they offer rates ten times higher than the national average. Evaluate your options and consider switching banks if your account doesn’t provide much interest.

4. Split Your Bills into Payments

Another good money habit to get into is splitting your bills into multiple payments. By splitting your bills into two or three monthly payments, you can save a lot of money on interest and put yourself in a good position to make a lasting financial impact.

You must make sure you have the money to make each of these payments as you don’t want to put yourself in a position where you’re struggling to make a payment and having to take out a loan to cover it. This is how people get themselves into debt. Instead, you want to make sure that you have the money available to make each of these payments so that you don’t end up racking up more debt than you already have.

You could consider Wagetap’s bill split feature to easily split your bill payments into three or four repayments that align with your payday. With this, you can pay for your gas bill, electricity bill, and more, without having to worry about how costly they are because you are splitting them into smaller amounts.

5. Make Wise Choices Despite the Financial Struggles

One of the best things you can do to make a lasting financial impact on your life is to make wise choices when you’re in a pinch. This is where you have a significant bill due and insufficient money to pay for it.

It’s essential to make wise choices when you’re struggling. Perhaps you can ask your utility company to delay your bill until next month.

The idea is that you should keep your composure in dire times and have a clear mind. Do not make impulsive decisions regarding your finances and put yourself in a difficult situation.

6. Separate Your Accounts

One thing to remember is to keep your bank account separate. Keep your savings accounts from your transaction and other accounts. This is crucial if you’re saving for something big like a new car or a house. You do not want to mix your savings with your transaction account. Doing this will make it more difficult for you to reach your savings goal. Instead, keep your obligations separate so you can easily track how much money you have saved without worrying about it being mixed up with your other finances.

7. Track Your Expenses

Finally, you should make sure that you’re tracking your expenses to see where your money is going. This is important for budgeting and staying on top of your finances. You need to know where your money will go to ensure you’re not spending too much or that you are spending enough for yourself to feel gratified.

You must ensure you’re covering all your expenses and have enough left to put towards savings, investments, and paying off debt. Knowing where your money is going can be difficult if you’re not keeping track of your expenses.