You can't take care of your money if you're crafting your strategy around hoping it will all work out.  Your grandparents might have earned enough interest from their savings account to impress the savviest investor, but today's banks barely resemble their ancestors, so that is no longer the case. If you want to accomplish your long-term goals and have a secure and worry-free retirement, it's a matter of spending less, living a more simple life and saving more.  Adapt these 5 habits and you will transform your finances for life.

-1) Create your spending plan  

And what is a spending plan?  It is a simple approach to help you live within your means by helping you keep track of the money coming in and how much you are spending.  It is a strategy to help you accomplish your goals and your dreams.  

The 50/30/20 rule states that your monthly expenses should be divided as such:

  • 30% for insurance, lifestyle, entertainment, and luxuries
  • 50% for monthly essentials like medical insurance, food, utilities, transportation
  • 20% for debt repayments, savings, retirement plans, and investments. 
  • Compile and categorize your income and expenses.  Check out or free websites and apps that will do it for you.

Gaining control over your spending is a great way to move from inertia to action.  

-2) Manage debt, get out of debt

Not all debt deserves to be thrown out with last year's credit cards.  Never buying on credit might give you peace of mind until you need to apply for a large loan. With no credit score, you don't exist to creditors; so while getting out of debt quickly will save you interest, in the long run, keeping yourself entirely debt free is a mistake. The key here is to manage debt prudently and use it wisely.

 a.   Make a decision to stop using debt to fund your lifestyle.  
 b.  There's good debt for example home loans, bad debt such as consumer credit loans and risky debt,  margin loans secured by investment portfolios. It is important to understand the difference. 
 c.  Combine credit cards and school loan debt to reduce interest rates

d.  Abandon the habit of paying credit card minimums and pay 5% of the balance

Your debt repayment plan should always be approached ambitiously and tactically. Choose a strategy that minimizes interest over time. Discipline is easier to drum up if your repayment plan has clearly defined goals.  

-3) Create your rainy day fund

If you have an emergency you need to know how to pay for it.  Too many times our emergencies have turned into the accrual of more debt.  A rainy day fund will create a buffer between you and additional debt.  Automate a fixed amount each week or month to boost your fund to six to eight month's salary. 

-4) Save, Save, Save  

The average inflation rate is about 1.1% a year, but past years have experienced a terrifying 18% increase. Your savings plan needs to overcome inflation. Putting away money on a consistent basis is the best way to save for expensive things such as vacations, cars, weddings.  Save for the long term at least 10% of your salary.  Get the maximum 401k match at your current job.  Leave your retirement accounts alone.  

Your portfolios will increase if you constantly work towards increasing your investments and reducing your fixed costs. This can be achieved by:

  • Raising your insurance deductibles
  • Reducing utility bills
  • Reducing food costs by planning meals in advance, eating out less
  • Shopping for insurance deals
  • Scrutinizing the necessity and affordability of the services and products you use

- 5) Stick to the Plan 

It's difficult to stick to your financial plan if you give in to the temptation to reduce contributions to your savings plans, spend spontaneously and change debt repayments.  As you become more engaged in your finances you will see how your money is working for you.  Stick to the plan- make it a habit and you will experience a feeling of being in control of your finances and your life.    

It's important for you to visit your accounts—remind yourself of what you're actually doing to secure your financial future. It's a real confidence booster.

Learn more about how to design your "Life by Design"

Take the first step,  let's get acquainted! I listen and inquire about your past and present experiences, family, and concerns. Tell me your story and I will design a plan based on your values, goals - what's important to you. 

Schedule your Free 30-minute Get Financially Fit Session TODAY! 

I can help you clarify your values, your individual wants and needs as I recognize each woman is unique in her style of living.  My "Life by Design" process can help you create and build the life of your choosing, to find comfort and success with your live the life of your dreams!

 Contact us to schedule a complimentary 30-minute discovery session to discuss your dreams, your goals, your values, what's important to you!  I am here to help!  

PARIS Financial Planning provides successful women with conservative strategies to grow their wealth during accumulation/savings years to protect their wealth during their retirement years and tax-advantaged strategies to distribute their wealth during their life and upon their death. 

"I am on a mission to revolutionize women's relationship with their money."

 Contact us to receive the highest levels of financial advice and coaching that will lead to confidence, engagement and goal attainment. 

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12 Wealth Building Habits of Financially Savvy Women