Money | Money habits to get you on the right path

Changing habits take time, especially when it comes to managing our finances. So what can you do to get on track?

The recession may have made us more aware of our finances and helped us manage our cash better, but many of us still have bad habits when it comes to money. There is the daily lattes, the pay-day splurges and the attitude of spend-it-all on our holidays.

These are habits you would love to kick, but many of us fail to. Replacing our bad money habits with good ones is the only way to succeed.

People that are good with cash simply know where each cent goes. From the first day of your next pay packet, write down every item that you spend. Include fixed costs, such as rent or mortgage, and discretionary spend. Once you have a clear picture of where your cash is going, you can manage it better.

Impulse purchasing is a bad habit that many of us simply don’t want to give up. And now that stores have the ‘last chance to buy’ rails, the temptation to buy it before it vanishes from the face of the earth is even greater. To overcome this, implement the 48-hour rule. Give yourself that amount of time to consider if you really want that item.

Instead of going broke thanks to one big event or occasion each month, such as a wedding or Christmas, write a list of what you have in your diary and what will the average cost be. Set aside money each month to cover such expenses.

Set up an account that has restrictions on withdrawing cash. It is too tempting to just dip into your regular savings when your current account runs low. If you lock up your cash in an account that requires notice – for example, seven days – you will be more inclined to manage your money better.

Finally, check all of your outgoing expenses. Is there anything that you can negotiate on? Are you getting the best deals for your phone, broadband or electricity? Take a look and don’t be afraid to change provider.