Read an article this week that spoke about the habits of people who are not worried about their finances. It is very likely that if you follow these habits, you will also not be worried because of financial issues.
1) They know where their money goes.
People who have a budget and know where their money is going are informed people. They don’t have to ask their spouse “why do you need more money, you just withdrew $100 from the ATM 2 days ago?” Every dollar spent is accounted for.
It is very hard to blow a couple hundred dollars impulsively if that money is already accounted for and needed somewhere else (on the budget). It is hard to justify buying new clothes with money that is earmarked for college debt repayment.
2) They know what they want their money to do.
People who have goals and are striving to reach their goals are financially motivated people. They want to pay down their house early or get rid of their credit card debt. And they have a plan in place to help them achieve those goals. Planning for and working towards (financial) success makes for few worries and a good nights sleep.
3) They don’t carry revolving debt or have a specific plan to pay it down.
Credit cards get many people into trouble. We, as youngsters, are not educated in the ways of the credit card. And then when we are 20 yrs old, many offers are thrust in our faces. When we sign up for these cards, we are somewhat ignorant as to the consequences of these cards. We are never told that paying off a $1000 purchase @ 20% will cost us $1612. If we were told that, we would never buy it on a credit card.
If people have run up the balance on their credit cards, they have learned of the evils of Mr. Mastercard and Mr. Visa and are actively pursuing getting rid of the debt. And when they do get it paid off, they will no longer keep revolving debt as part of their monthly obligation. If they charge something, they will pay it off when the 1<sup>st</sup> bill comes. Not the 92<sup>nd</sup> bill (which is how long it’d take to pay off $1000 if you made the min payment of $10 every month).
4) They invest in their job skills, and don’t expand their lifestyles as fast as their salaries.
One of the things Warren Buffett always tells young people when they ask him for advice is to “invest in yourself.” Whether this be through college, an internship, or learning more skills than are required by your job, follow the Oracle’s advice and you will be glad you did. Make yourself more qualified than your peers and invaluable to your employer.
And an old boss once told me, when he got a raise he spent half of it, and saved the other half. This was good advice. If you’re already living on your current paycheck, then you don’t need to spend the raise. But as a reward, take half of it and place it somewhere in your budget that will improve your quality of life. And place the other half in your 401k, your IRA, your 529 college savings plan, your automatic investment plan, etc. If you follow this advice from the time you graduate college, you’ll be rolling in the money by the time it is time to retire.
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