Are Your Money Habits Setting You Up for the Life You Want?

Money is the final taboo, at least here in the UK where we seem to talk about everything but money. And we should be. Money is one of the most common reason for anxiety and one of the most common thing for couples to fight about.

And it doesn’t need to be like that.

By understanding some personal finance basics and by implementing a number of habits and strategies, we can feel confident that our money is doing what we want them to do, instead of being this black hole we are trying not to think about. And the best thing is, once you have put these processes into place, the review time is truly minimal! You can move on with your life knowing that you are on the right track financially!

What is your financial black spot?

Almost all of us have some kind of black spot for our personal finances. For me it was my pension. I have always been able to budget reasonably, and since starting my career I’ve managed to save a little most months, but my black hole was pensions.

I knew I was paying into one. It’s been taken off my pay check every months so it must have gone somewhere! But how much it was, and if that was going to be enough to live on at some point I had no idea.

Of all the things I’ve been changing in my life, my pensions were one of the last things I conquered and as I’m writing this, I wish with all my heart I had done this when I was in my twenties or early thirties, not waited until I turned forty to dare tackle the mountain of anxiety that was pensions!

Read more: How much should you have saved for retirement at your age?

What is your black spot?

For you it may be something else that creates that scary feeling:

• You credit card bill?
• Trying to save up for a deposit on a house?
• The fact that there never seem to be any money left ant the end of the month?

Fear not! In these posts I’ll go through what you need to know and what you need to do to get your personal finances in order, as well as direct you to some really good resources that I have used setting up my financial personal management cycle.

Until I started to really understand my personal finances, I would never have thought about them in the light of habits. But the more I learn the more I realise that that’s all it is!

Your personal finances are the sum of your spending and saving habits, and not just the double mocha latte that we may or may not be buying on a regular basis.

Do you have successful money habits?

Think about the following questions:

• Do you cook your food, do take away or go out for dinner?
• Is shopping a hobby?
• Are your pension savings getting deducted from your pay?
• Do you do your food shop weekly or on a daily/as needed basis?
• Do you drive? A lot?
• Do you have a direct debit to an investment or savings account?

There is no wrong or right to these questions, but what they do is highlight habits that you currently have, that are impacting your personal finances, and therefore your choices. Not following me? Let me tell you a story about the choices my partner did last year.

It’s not your salary that makes you rich, it’s your spending habits.

Charles A. Jaffe

Why save money?

Mr. Habitista had a good job, good pay and good benefits, however the commute was around 3 hours a day and after some leadership changes at this company, the role was no longer one he enjoyed.

It went so far that he was completely burning out and at the end of the day he had no energy at all, least of all for job hunting. Mr. Habitista has always been good with money (much more of a natural saver than I am!) and he had a solid emergency fund which meant that he could live for several months without desperately needing to work.

We discussed and agreed that he was going to “buy himself” some time off. He would still contribute to the household from his emergency fund so we didn’t need to significantly change our living standard. Hhe was going to take some time to rest up and figure out what he wanted to to next. So he quit! Just like that. With no other job lined up.

Learn more: How to reach your long-term financial goals and not worry about money

F-U money

In some circles, this is known as F-U money (yes, that F-U). To have the savings available to leave if you end up in a situation that is not acceptable. To have the freedom to make choices. By living a life where your habits sustain a level of savings - by spending in accordance with your values instead of spending for the sake of it - you can quickly put yourself in a situation where your financial situation, and therefore your choices, gets better and better for every day!

And what happened with Mr Habitista? He ended up taking 11 months off work before deciding to go down a pay grade to do work he enjoyed, and he now walks to work as it’s only 15 minutes away. It will take him some time to build up his emergency fund again but in the mean time, we are both much happier, living a life we enjoy instead of feeling that work takes away all joy in life. It shouldn’t be an either or.

It’s time to understand how your money habits and your values allignes and learn the tools to change them so that you have a system in place to be able to live the life you want.

Get reading:

100 Easy Ways to improve your finances

Value-based spending: How to feel calm about your money

Budgeting is important because it will make you money smart

Easy investing for beginners: How to empower yourself financially