How to Build Healthy Financial Habits

Learning to organize your money more effectively is a skill that everyone needs to have. No matter how well off you might be in general, you can always benefit from a better ability to handle your finances and to know how to identify certain issues with them. But this boils down to a set of habits, and like all habits, they take time to form and solidify.

The good news is, they’re not particularly difficult, as far as habits go. You just need to be persistent and understand the implication each of your actions has on your finances as a whole. And the more you pay attention, the easier it will get to learn new things in the future. With experience, your ability to identify critical pieces of information is going to improve significantly as well.

Understanding Your Situation

The first and most important thing to get right is to have an objective, honest overview of your current finances. Unfortunately, this is more difficult than you might think at first. After all, ask anyone what they think of their current situation, and most people would readily tell you that they understand exactly what’s going on with their money.

And as you’re probably guessing, a vast majority of them would be wrong. It takes time and effort to begin to properly understand how your money works and how to control it properly. And until you’ve reached that point, you should proceed with relatively low confidence. Always assume that there’s more to the picture than you’re seeing, because that’s often a safe bet.

Getting Rid of Harmful Habits

You probably have more harmful financial habits than you’d think, and it may even be difficult to spot them if you aren’t paying attention. Many people go through their lives spending ridiculous amounts of money on things they don’t really need, and they never see anything wrong with that. From that $5 cup of coffee on your way to work, to taking the tram instead of riding your bike for a couple of stops – they might seem like little things, but over the course of a month, they can stack up quite fast.

Identifying those problematic habits can be difficult though, because many of them will be tied to your lifestyle one way or another. You will have to take a long, hard look at your situation and start getting rid of the things that don’t bring you any real benefit. And sometimes, it can be challenging to cut the rope.

Using All Tools Properly

The financial market is full of tools that can help you in a number of different situations. Things are getting better and better in this regard, as financial institutions keep developing more advanced products to serve the needs of the average consumer. You should take full advantage of these tools, because they may sometimes be the difference between continuing your life as usual, and going through severe financial distress.

Take a loan for example. Many people are sceptical towards the idea of taking out a loan for various reasons, but that’s not a good thing because it prevents them from considering an option that might actually be viable for them. A loan isn’t the ultimate solution to every financial problem, sure – but it can sometimes go a long way towards making things better.

Expanding Your Horizons

You should always try to think outside the box when it comes to your personal finances. Don’t just look at what your friends, colleagues and family are doing – think for yourself and try to figure out what would work best in your specific situation. For example, investing is something not everyone considers early on in their lives, but it’s often a good opportunity to get started with the advanced areas of the financial market, and improve one’s situation along the way too.

Just do this carefully of course – the point is to improve your financial stability. This can’t really happen if you take careless risks without calculating the implications first. But if you have a planned approach and check your situation at every step, you can expect to progress much faster than your peers. In a few years, you’ll be in a completely different situation from most of them. And you should keep working to improve it, even at that point.

Don’t make the mistake of thinking that keeping your finances in check is some sort of highly advanced skill that’s out of reach for most people. In many cases, it just comes down to discipline and being informed. And while the first part is up to you, the second can be covered rather easily with the help of the internet. Go online, read some tips on how to handle your finances, and before you know it, you’ll be thinking in a completely different way from most people!

Good Sources for Urgent Cash

If you find yourself strapped for cash, don’t panic. There’s usually a way out of this situation, although you may have to deal with some temporary discomfort as you get through it. Remember that there’s always a light at the end of the tunnel, and the modern financial system is designed to prevent cases of people falling through the cracks and being left stranded without help.

At the same time, it takes some knowledge to navigate this system efficiently. You have to understand your full range of options for assistance, and know when the time is right to take advantage of each of them. Not all options are equal, and some will work out much better than others.


If you have any money saved up, now is obviously the right time to put it to good use. This might sound obvious, but many people put off dipping into their savings for far too long in situations where they need money urgently. And that’s a problem, because it often leads to resorting to alternative solutions that might put the person in an even more difficult situation.

That’s the whole point of savings in the first place – to help you pull through difficult moments without too much pain. It doesn’t make sense to save up a lot of money and never use it, so if you’ve been diligent about maintaining a good savings account, by all means dip into it if you can recover it quickly enough afterwards.


A loan is also a great option in many cases, even though some people treat the idea with suspicion. Sure, it has some negative implications if you fail to make your payments on time, but it has to work that way in order for the whole system to make sense in the first place. After all, lenders need to profit too, and they have to compensate for the risk that comes from dealing with people who might end up defaulting on their loans.

And unfortunately, defaulting does happen often in some segments of the lending market, and it’s a major problem for the industry. So if you want to point any fingers, look in the direction of those who take out loan after loan irresponsibly with no intention of ever paying them back.

Friends and Family

An alternative to a regular loan is asking friends and family for help. This can often be a much more viable option if you have the right contacts, but it also has some strings attached. Mostly, you will have to swallow your pride and admit to others that you have financial problems. Not everyone wants to go through that, and some people prefer to try dealing with the situation in an alternative way instead of admitting their problems.

But if things are really bad, this can be a more viable option than the alternatives. You just have to be absolutely sure that you can pay pack everything you’ve borrowed. After all, you don’t want to destroy your relationship with someone over some money, right?

Selling Unused Items

Do you have anything around the house that you don’t need anymore? Now might be a good time to do some spring cleaning and optimize your living space. Many people live with a strange attachment to some of their possessions, and it can be a harmful one for many reasons. For one thing, you’re limiting your living space by filling it up with useless clutter. You’re also limiting your financial potential by not selling off things that you aren’t using anymore.

Just be reasonable about this, and don’t sell things that you might need in the future. But as a general rule of thumb, if you haven’t even thought of something in the last year, then it’s probably a good candidate for your next cleaning session. It’s a good idea to make a list of these things and have it ready in advance, so that you’ll know exactly what you can sell off when the time comes. Many people do this with things they buy online, as it’s easy to keep track.

You generally have more options available for getting your hands on emergency money than you might think. Some of them might require you to go through difficult times, while others will come with some long-term strings attached. But in any case, it’s usually better to endure those things rather than dealing with the long-term repercussions of financial struggles. Many people overestimate their ability to resolve financial problems on their own, and make their situations progressively worse over time as a result. It’s a shame when you consider that in many of these cases, it’s just a matter of reaching out early enough and paying attention to your circumstances.