How to Build Financial Well-Being with These 4 Habits

Existing in a state of financial well-being means that you’re in a position where you’re in control of your finances, you have freedom of choice with your money, and you feel financially secure, both for the present and the future. It’s a state where you’re on track to achieve whatever financial goals you’re pursuing. 


Building financial well-being takes patience and self-discipline, but it is possible. Start taking control of your finances today by following these four habits. 


  1. Be consistent in saving


Having some money in a savings account is one of the best ways to ensure financial security for yourself. Living paycheck-to-paycheck can be dangerous, as it leaves no wiggle room for emergencies or other unexpected costs. Whether you lose your job or your car breaks down, it’s important to have a safety net you can fall back on just in case. 


A savings account isn’t just useful for getting you out of a tough spot either. You can actually make money by just letting your money sit in the account and generate interest. The higher the amount in your savings account, the more you’ll make. 


The best way to build and maintain a savings account is to consistently deposit money into it, even if it’s just a small amount. Designate a portion of your paycheck for savings and put that portion into the bank as soon as you get it. Over time, your savings will grow and your financial security will increase alongside it. 


  1. Avoid unnecessary debt


There are times when it’s perfectly reasonable to borrow money. Many people take out loans to purchase a car or a house since they don’t have the full amount in cash. However, you should be extremely careful about what you go into debt for. 


Going into debt ties you up into a financial obligation that can potentially cause a lot of stress and hardship. Every dollar of debt you accrue will eat away at your future paychecks. Keep this in mind when making big purchases that may require you to take on new debt. 


The best and most simple strategy for avoiding debt is to only buy what you can afford. Be sensible and don’t borrow money to make flashy purchases.


But what if you’re already in debt? Tally up what you owe and come up with a plan to pay it back. You may be able to negotiate the debt down or set up a payment plan that works for your budget. For instance, if you have outstanding tax debt you could qualify for an IRS installment agreement that allows you to repay the debt over time. 


  1. Stick to a budget


Creating and sticking to a budget can help you keep track of your spending habits and achieve your short- and long-term financial goals, so come up with a budget that works with your current income and satisfies your needs. 


There are all kinds of budgeting strategies out there, but how you spend your money ultimately depends on your own personal financial situation and priorities. If you’re wondering about the basics of setting up a budget, though, follow these simple steps:


  • Determine your post-tax monthly income. 
  • Add up a month’s worth of expenses. This includes essential expenses like rent and transportation, as well as non-essential expenses like eating out and entertainment. 
  • Subtract your expenses from your income. If your expenses are greater than your income, you might consider cutting down on non-essential costs. 
  • Save and invest whatever income is left over. Alternatively, you could save a fixed amount from every paycheck to work towards a goal such as buying a new car or taking a vacation. 


  1. Set personal finance goals


Coming up with some financial goals can help guide your spending habits and determine how much you should be saving. Whether they’re short- or long-term goals, make sure they’re realistic and actionable. 


Maybe you want to retire by the time you’re 55 years old or go to Hawaii next spring for your honeymoon. These are specific, time-bound goals that you can work towards achieving. 


On the other hand, setting unrealistic or vague goals will be more difficult—if not impossible—to achieve. Thus, you’ll be setting yourself up for failure rather than success. 


It takes time to build financial well-being. You’ll have to stay disciplined and make sacrifices along the way, but in the end it’ll likely be worth it, as you won’t have to stress over the financial issues that so many Americans find themselves dealing with. 


Sudarsan Chakraborty is a professional writer. He contributes to many high-quality blogs. He loves to write on various topics.