Long-term financial success depends on good money management habits. While there are plenty of tips and quick fixes designed to save you money, they cannot ensure your financial well-being indefinitely.

Instead, you need to change the way you handle your finances directly. The following sections explain how you can develop your money management habits.

Have a Financial Plan

If you create a budget, or financial plan, for your future, you are more likely to complete your financial goals. Studies have revealed that clear, specific financial plans are great tools for anyone to use. To start planning, you should consider the next five years of your life and your financial expectations for it. The following aspects of your finances should be considered in your five-year financial plan:

  • Your desired income
  • Your anticipated expenses
  • Your investment goals
  • Your savings goals

Writing down your plan on paper or a computer can help you visualize what your long-term goals can realistically be. Because you may have to sacrifice a few smaller goals to achieve your long-term goals, make sure you are satisfied with your goals. Posting your financial plan on your wall or placing it on your desk where it is visible to you can remind you that you are working towards a financial goal.


Although investing may seem like something reserved for rich eccentrics, you can start investing in your financial future right now, and it can be as simple or involved as you want it to be. If you are starting with no existing investments, then you are advised to begin investing in yourself. This means allocating funds for an emergency savings account, adding to your employer-sponsored retirement plan or budgeting to further your professional education. In short, you do not need to master the stocks to reap the rewards of investing.

However, if you feel comfortable with your savings accounts and want to delve into the investing market, you can consider long-term savings options like stocks and bonds that allow you to invest on your schedule and budget. You decide when and how often you can put money towards these types of investments. A common way to add to your investments is to add all of your spare change to your investment account or to round up purchases and put the difference into your account.

Regulate Your Purchases

Overlooking small expenses is a common mistake that savers make when tracking their finances. Though, if you start to notice that your everyday purchases are adding up to a significant amount, you should consider cutting some expenses altogether. For example, buying a daily cup of coffee from your local cafe can cost you up to $150 per month. Remember to only cut purchases that are costing you more than they are worth.

Believe in Yourself

When you believe in yourself, you will be able to better handle the money you own and accept the extra money that comes your way. To become wealthier, you must behave as though you are ready for wealth, and you must believe that you deserve the wealth you have and earn. Demonstrating confidence and maturity is important when dealing with important financial matters, so believing in yourself can make a huge difference.

Surround Yourself with Successful People

Just like believing in yourself can affect your confidence and ability to manage money, being around people who are good with finances can impact you greatly. If the people around you are motivated to save, spend less and invest in themselves, then you are likely to do the same. Some studies have even shown that surrounding yourself with successful people can encourage you to take advantage of opportunities you may not have otherwise. Having a healthy social network is essential to achieving financial stability, opening your mind to new ideas and improving your mood. You should seek out relationships with people who you admire and aspire to be like.

Pay off High-Interest Debt

If you have high-interest debt due to credit card bills, student loans or other reasons, you should prioritize paying off that debt before saving or investing your money. Avoiding paying off debt can result in compounded interest and longer payment periods. You are advised to pay off any outstanding high-interest debt you may have before making a financial plan devoted to saving for your other financial goals.

Save Bonuses

Maybe you receive a bonus at work, a big tax return, lottery winnings or any other money that you had not expected to get. While it is tempting to spend the sums of money on a nice night out or a concert happening this weekend, save the money. Add the bonus funds to your emergency savings or investment account or use it to pay off your debt. Keeping the money for later use will make it go farther than a one-time event ever will.  

Cook at Home

As a general rule, you should not be spending more than 30 percent of your income on eating out or take-out food. While everyone may have different lifestyles and eating habits, it is unwise and unhealthy to eat outside of the home that often and to spend a significant portion of your total income on food at restaurants. Consider how often you want, and have time, to prepare meals at home, and then create a realistic goal for yourself. Perhaps you will strive to eat out only three times per month, or maybe you will limit your eating out by cost.

Educate Yourself

The internet is a great source of information, if you know where to look, and free online classes are becoming available in more and more subjects. You may even start earning credits towards your bachelor’s or master’s degree while learning about finances and how to secure a financially stable future for yourself and your family. After determining the status of your finances by collecting your financial documents and calculating your available budget, consider enrolling in a finance course to learn the best money management or investment practices for you.