Reader Dave sent me a link to Laura Rowley’s Four Habits of Financially Peaceful People.
The Habits (along with my thoughts on each one):
1. They know exactly where their money goes. I’ll admit that I pay less attention to this now than I used to. But, if my finances were really tight and I had to make changes, I would definitely want to know where every dollar was going.
2. They know what they want their money to do. You have to have goals otherwise you’ll see no point in saving your money. The biggie goal for everyone is retirement. Other goals could be an adequate emergency fund, downpayment for a house, college fund for kids, money for a new car, or anything else that will require a significant chunk of change.
3. They either don’t carry revolving debt, or have a specific plan to pay it down. We paid off our credit cards two years ago and have never looked back. It is SO AWESOME to not have credit card debt! I can’t tell you how good it feels! It’s amazing how quickly you can save up for something when you don’t have to use your money to pay off credit cards.
4. They invest in their job skills, and don’t expand their lifestyles as fast as their salaries. This is really the only way to get ahead financially. You’d be amazed at how quickly you can improve your financial situation when you don’t increase your lifestyle everytime you get a raise. It’s true that you really can spend everything you make if you don’t practice discipline.
So, what are your thoughts about these habits? I think all of these habits are important and I pretty much practice all of them. What about you?