Five Money Habits That Can Change Your Life

In an economy where money is tight and financial obligations are mounting, it’s still possible to save for the rainy day only if we imbibe the right habits that underpins self-actualisation.

In the last eight years, there has been a standard of living crisis due to elevated inflation, foreign exchange scarcity, and high unemployment rates, which are significantly responsible for deteriorating consumer spending.

However, with excellent saving habits amid these hard times with a bit of frugality, most can overcome money challenges.

Here are five spending habits that can salvage you from penury

Build a budget and cling to it

While creating a budget to track one’s spending requires a great deal of discipline and focus, it is important you keep a budget that will help you keep track of your income and your expenses.

Before you go to bed or while you are less busy, take down all that you have spent. Such a habit enhances planning and gives you an idea of where the chunk of your money goes on a monthly basis.

Cut down on your expenses

Track expenses causing a blow to your budget so that you don’t become a victim of lifestyle inflation.

Pay attention to those little things that undermine savings. For instance, keep your eyes on your utility bills and other expenses.

And for those who are smokers and drinkers, cut down on these habits as they drain the pocket.

I met someone who told me she parked her SUV jeep as it is cheaper to take public transport given how much it costs to fill the tank of the expensive car.

Someone else said that he shops second hand and stopped eating at expensive restaurants.

 Reduce your debts, eschew loan apps

A wise person avoids high interest debt like credit card debt or loan apps which drains finances.

The best way to pay back money that has been borrowed is to follow the aforementioned rule: cut down on your expenses.

There’s nothing wrong with borrowing, but there is a problem when debts pile as interest payments skyrocket in a high interest rate environment like Nigeria brought on by inflationary pressures.

Educate yourself on financial literacy daily

It is generally accepted that what separates the rich from the poor is access to information the former uses to magnify his wealth while the latter wallows in ignorance.

To learn how to develop a savings culture, devote 20 minutes of your time to reading books about financial literacy or personal finance and your business.

It could mean going to the blogs and relevant finance websites (like MoneyCentral) to learn how to build wealth.

Monitor your progress

In the words of Socrates, “the unexamined life is not worth living.”

The same is true of financial freedom. You need to measure how far you have gone in savings, and the best gauge of finances is a personal balance sheet which measures what you owe and spend on a monthly basis.

It could even include liabilities. A proper book keeping habit enhances financial organisation, which helps secure your future and retirement.

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