Successful women acknowledge it is not always about how much money you make, but how much money you spend. Including shopping for groceries, subscribing to streaming services, or purchasing a vehicle, being frugal with your money can help you keep more money in the account.
Let’s look at the 5 Money Habits of Successful Women:
1) Keep Tabs On Your Money
Foremost, keep track of your finances. This involves understanding exactly how much money you bring in and how much money you spend. And I’m talking about getting down to the nitty-gritty here. Make it a habit to record every dollar you earn and spend. How much money did you make last month? How much did you spend on groceries? How much did you save?
Think about it if it feels like too much. Every single dollar you earn is the byproduct of your hard work, blood, sweat, and tears. (Emm, maybe there is no blood, but definitely hard work). Pay attention to your money just as you would to anything else important in your life.
2)Establish Financial Goals
To build wealth, you must first understand what you want to fulfil. Do you want to pay off your debt in a certain amount of time? Is there a target net worth you’d like to fulfil?
Make a list of your financial goals and write them down. Create an action plan to determine how you’ll get there and hold yourself accountable.
Remember that the sky is the limit, so don’t sell yourself short with your financial goals!
3) Prevent Lifestyle Inflation
Avoiding lifestyle inflation is one of those financial habits that will pay off in the long run. So, you’re probably wondering, what’s the deal with lifestyle inflation? What is happening? Ladies, you have a valid point!
Lifestyle inflation, also known as lifestyle creep, occurs when we spend more money on luxuries that we perceive to be necessities, even though they add no direct value to our lives. As our income grows, we spend more money on things we wouldn’t normally buy just because we can. It’s a cross between Keeping Up with The Joneses and Get Rich Or Die Trying.
The cost of living can quickly catch up with you.
4) Establish An Emergency Fund For Yourself
You require an emergency fund regardless of your current income level, amount of debt, or financial situation.
Consider your emergency fund to be a rainy-day fund- a sum of money that is liquid and easy to access in the event of an emergency. Perhaps it is a sudden job loss, a broken furnace, or unexpected car repairs. The list continues. Whatever the case may be very well be, you’ll always want a lump sum of cash to fall back on if required. A good place to start is to at least have $1000, and you should accumulate that amount to cover 3-6 months of your living expenses.
$1000 may appear to be a large sum at first, but baby steps add up to the enormous results, so start saving what you can and you’ll be surprised at how quickly you can build up an emergency fund.
5) Begin To Invest
Lastly, we have to invest. Would it be better that you can make money work for you, rather than the other way around?
Allow me to introduce you, your new best friend, as well as a beginner’s concept on investment that you should be familiar with: compound interest. So, compound interest is the concept of your money creating money (call interest) and that helps your money grow! Here is the fundamental principle of investing.
In financial planning, investment brings wealth, which is why it’s so crucial.