We’ve all heard the old saying about how “early to bed, early to rise, makes someone healthy, wealthy and wise” and we can all probably think about how very questionable it is in reality.  That said, however, we probably also know that bad habits can have a really negative impact on your finances, which suggests that developing and applying good habits could certainly improve your finances, if not actually make you rich.  With that in mind, here are a few thoughts to consider.

Even the smallest habits can add up (or down)

“Look after your pennies and your pounds will take care of themselves”.  It’s actually true.  While those “little” expenses might not seem like much and, indeed, might not actually be much, not individually, when you add them up, one on top of the other, they can really amount to quite a chunk of your finances, which means that if you can cut them out, or at least trim back on them, you can really start building mounds of pennies, which will eventually turn into pounds.

Switching out habits on a “like-for-like” basis can be a painless way to save money

Let’s say you love your morning caffeine and can’t get through your commute without it.  You can buy a really expensive coffee on the way to work or you can make it before you go and drink it on the train.  At least, that’s the theory, in practice, your barista probably makes your favourite brew far more quickly than you could at home, especially when you’re still waking up and you’d rather have the extra time in bed anyway.  That’s fine, in that case, how about switching out the habit of getting a super-expensive drink for the habit of taking your own cup and extra ingredients with you and then picking up the base drink in your own cup and adding your choice of toppings to your liking when you are settled on the train.  It’s only a slightly different habit but, as previously mentioned, those slight differences can add up (or down) to big savings.

Developing the habit of prioritising can bring all kinds of benefits

Each penny you earn can only be spent once.  Admittedly you can, hopefully, usually earn more pennies, but that takes up more of your time and the fact still remains that, even if you earn more pennies, you can still only spend each of them once.  This means you have to spend them where it matters most to you and in order to do that effectively, you need to be clear about what matters most to you.  This applies to everyday decisions as well as to occasional ones.  For example, on an everyday basis, you may have a choice between buying premium brands and buying budget ones.  You may prefer the premium brands, but if you opt for the budget ones, you may have more money to spend elsewhere.  Neither option is “right” or “wrong” in and of itself but one of these options will be the right one for you and the other will be the wrong one for you.

Developing the habit of reviewing your life can help you identify the changes which matter

Life is a process of change.  Some of these changes are obvious, but many are small, incremental changes, which can easily slip by, unnoticed, until the gap between our long-established habits and our current situation as too big to be ignored, by which point, making the necessary adjustments to our established habits can be a painful experience.  This pain can, however, be easily avoided by developing the habit of undertaking regular reviews of our lives, both financial and personal.

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