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5 Healthy Money Habits To Take Into The New Year

Developing healthy money habits is crucial to setting you up for a healthy financial wellbeing. Sitting down to get a grasp on managing your finances and money spending habits can often seem daunting, but once you can break your spending into bite size pieces, it quickly begins to feel more manageable. In this blog, we will run through the five top healthy money habits to set you up for financial peace of mind in no time.

Set Financial Goals

The first step to improving your finances is by setting clear and achievable financial goals. This provides a clear direction for where you would like your money to go and gives that extra push of motivation when you need it. Whether it's saving for a deposit on your future new home, building an emergency fund or saving for renovations, it’s important to clearly define your objectives so that you know what you are working towards. Break down larger goals into smaller, manageable steps, this not only makes them more attainable but also allows you to celebrate your progress along the way. Don’t forget to keep your goals in mind as you make big financial decisions to stay focused on your long-term targets.

Pay Yourself First

The term ‘pay yourself first’ refers to prioritising your spending and ensuring that you pay your saving goals off first before you begin to spend money on miscellaneous items. (We see you eyeing up that overpriced coffee!) This makes sure that you will always be able to afford to put money aside to put into your savings instead of getting to the end of the month and realising you have no money left to put towards your money goal. 

Top Tip: Upgrade your bank account to a ‘Round Up’ Account. This is where any miscellaneous purchases will be rounded up to the nearest pound and the spare change will be added to your savings without you even noticing!  For example, if you bought a coffee for £4.70, your account would round it up to the nearest pound and put 30p into your savings account. These little pockets of change are something you won’t notice in everyday life but it will all quickly add up in your savings account!

Set a Budget

Setting a budget is a really important step in setting you on the path of healthy money habits. Start by documenting your monthly income and then begin to work your way down your outgoings. Begin with your fixed outgoings, these are items that can’t be changed such as your car payments, utility bills, savings etc. This is also a great time to look at your spending and look at ways you could possibly reduce your bills. Ask yourself questions such as could I shop at a cheaper supermarket? How can I be savvy and reduce my energy bills? Once you have this clearly set out, it is time to work out how much money you have left over and then allocate specific amounts for variable spending such as dining out, nights away, treats for yourself etc.  It is important to regularly review your budget to track your spending patterns and identify areas where you can cut back or save more. Don’t forget…a well crafted budget empowers you to make informed financial decisions for the future!

Educate Yourself on Financial Wellbeing 

If you are still reading this blog, you are already on the right tracks! Take the time to educate yourself on topics like budgeting, investing, and debt management. There are so many resources, opinions and jargon out there that it can often get intimidating, don’t worry we completely understand! That is why we are here to help make financial advice accessible for everyone, we will be regularly sharing financial help throughout the whole of January so keep posted for more advice.

It's important to always stay savvy to what is happening within the financial world such as mortgage rates, inflation, etc. These are often spoken about in the news or on television but another great way of learning about money saving tips is through bitesize content on social media platforms like Instagram and Tiktok. It is important to remember that the more you understand about your personal finance, the better equipped you'll be to navigate the complexities of the financial world.

Avoid Impulse Buying

We are all guilty of getting a little too excited and impulse buying something we don’t really need, it can derail even the most disciplined budgeters. Most of the time, this impulse comes from a rush of instant gratification mixed with a wave of dopamine and the excitement of buying something new (sounds pretty addictive right?). Try to train yourself to pause and evaluate the necessity of your purchase before making it. A great rule to follow is if you find something you really want, wait a week and if you still can’t stop thinking about it, then treat yourself. To avoid everyday impulse buying, create a shopping list before heading to the store and stick to it or make sure to avoid places that you know trigger bad spending habits (especially those expensive coffee shops and drive throughs) This simple practice can help you curb unnecessary expenses, leaving you more money for the bigger things really want like your dream home or that brand new sofa!

Remember, the key to creating healthy money habits is consistency. Small, positive changes in your spending habits can create significant improvements in your financial wellbeing. Reading this blog alone means that you are on the right track! Follow these simple steps and you will reach your financial goals in no time.