4 money habits every woman should adopt

Why do some women plod along financially while others thrive? Does it come down to money habits

Women that prioritize paying themselves first may end up in much better financial shape in the long run. Let’s face it, some of you are savers and others are spenders. Spending is fun, but it may be setting you up for financial struggle down the path. Paying yourself at the beginning of the month (saving) can help you build a nest egg, giving you better peace of mind that you can weather financial emergencies and create wealth. If you wait until the end of the month to save whatever is left over, there’s rarely anything left over.

How Do You Build Up Savings?

Well, money not spent is money that can be saved. That should be obvious, but some women never grasp this truth. In the psychology of spenders, money unspent is money not enjoyed. Less spending means less fun. When that cute little outfit calls out to you, think about it overnight. Frequently it’s not so cute the next day. Being a saver does not mean being a scrooge. However, it does take some discipline dedicating a percentage of household income to future goals and needs. Find joy in watching your savings balance going up. These four money habits will help you save money more easily and quickly.

1. Budgeting

What percentage of US households maintain a budget? In 2013 Gallup posed that question to American and found that the answer was 32%. (Another interesting factoid from that survey; just 30% of Americans had a long-range financial plan.) Long term planning is a good habit. You want to set long-range objectives – identifying how much you need for retirement, for eldercare, for college educations. The very presence of such long-term goals reinforces your long-term commitment to saving and investing. Frequently, budgeting begins in response to a financial crisis. Preferably, budgeting is proactive, not reactive. Instead of being about damage control, it can be about monthly progress. Budgeting also includes planning for major purchases. If you create a plan to buy a big-ticket item by saving ahead, you may approach that purchase with less ambiguity – and less potential for a financial surprise.

2. Keeping Consumer Debt Low

If you use credit cards “like cash” you may find yourself living “behind the curve”. No one chooses to be poor but living this way is as close to a “choice” as you can make. When you habitually use credit to buy things, you run into three problems. One, you create a mound of debt, which may take years to eliminate. Two, you set yourself up to live paycheck to paycheck. Three, you reduce your potential to build a surplus.

3. Contributing to Accounts That Help Grow Savings

Contributing automatically to employer-sponsored retirement accounts, IRAs and other options that allow you a chance to grow your savings through equity investing are great habits to develop.

4. Investing with Diversification

Smart women invest with diversification. They invest in such a way that their portfolio includes a range of investment vehicles.

Everyone would do well to adopt these money habits. But it’s vital for women that want more control over their money. When money issues threaten to control you, a change in financial behavior is due.