3015: 5 Financial Habits Every Powerful Woman Needs by Daneika of Learning 2 Fly on How to Save Money

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[00:00:51] This is Optimal Finance Daily, 5 Financial Habits Every Powerful Woman Needs by Daneika of learning2fly.org. What is your long-term vision for your financial life? Many of us haven't thought much beyond the immediate future, meaning what's happening next month. It's the short-term outlook on our lives that catches up with us in the long run.

[00:01:13] As women, it's important to talk about money and develop a positive relationship with it as soon as possible. Why? Because we want to have the ability to choose the life that's best for us and have the time to pursue those choices. These reasons make it critical to take the time to understand and define your financial goals. Your goals will change over time, and that's precisely why you need to implement these five financial habits as soon as possible.

[00:01:39] These habits will give you the ability to easily transition into the new phases of your life as new priorities emerge. Financial Rules to Live By Paying Yourself First Think of this as your safety fund. I missed the boat on this one for so many years. I was in the habit of paying myself last because I thought it was better to take care of everyone else first.

[00:02:03] It's important to honor all of your financial obligations, but understand your biggest financial obligation is to yourself first. If you don't get in the habit of paying yourself first, what will your future look like? I believe this is the number one habit that will save you from being at the mercy of someone else or being obligated to do something you don't want to do. It's not about saving lots of money, especially if you're just starting out. It's more important to build the habit of paying yourself first regardless of the actual amount.

[00:02:33] You will look back and thank your younger self for creating this habit. Create a spending plan How will you know where your money is going if you don't keep track of it? I know this seems like a very obvious answer, but it's not enough to just notice where your money is actually going every month. The other component is creating a spending plan that reflects your values and priorities. This requires you to actually make decisions and put systems in place to enforce the rules you've decided upon.

[00:03:02] Don't do what I used to do. I would observe where the money was going and then get mad at myself for overspending. I didn't make any decisions about what mattered most to me in the long term, so I just spent the money. Live below your means It may be hard to believe now, but you will be much happier when you're able to choose the direction you want to go in your life, not when you accumulate more stuff. The way to do that is to live below your means and to account for all of the unaccountable things in life

[00:03:30] in order to give yourself breathing room. The more of a gap you can create between what you earn and what you spend, the easier it will be to navigate a sudden job loss, an unexpected medical condition, or major car repair. Living below your means will give you peace of mind when unexpected emergencies come up, because it gives you time to consider your options instead of being forced to react immediately. Eliminate debt

[00:03:56] I know this may seem like a no-brainer, but unfortunately, it's too easy to get caught up in the debt cycle. Again, I'm speaking from personal experience as a survivor of many financial disasters. The obvious answer would be to not take on any debt, but if you find it a bit too late to consider this an option, take a look at your budget and consider the following. Where can you cut your spending and redirect the money to reducing debt?

[00:04:22] Can you decrease your housing, transportation, and food expenses to pay off debt faster? Another option would be to think of ways to increase your income in order to reduce debt as fast as you can. Create and contribute to your opportunity fund regularly. The opportunity fund is for all of your big goals and long-term plans. It could contain money for things like the once-in-a-lifetime vacation you want to take, the business you want to start in the future, or the ability to take time off work to write your novel.

[00:04:52] Whatever long-term goals you may have, deciding to create an opportunity fund for yourself will give you the ability to say yes to your deepest desires and dreams in the future. Having these financial habits in place will allow you to create a foundation to build a better future. There's no better feeling in the world than having the time and means to be able to pursue the things that truly matter to you. That's what being a powerful woman is all about. You just listened to the post titled,

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[00:06:18] Cancel your unwanted subscriptions and reach your financial goals faster with Rocket Money. Go to rocketmoney.com slash OFD today. That's rocketmoney.com slash OFD. rocketmoney.com slash OFD. I think this was a great list of financial habits to live by and I've certainly benefited from applying them to my own life. The great thing about focusing on building habits is that over time, habits become your autopilot.

[00:06:47] So you don't need to think too much about money management once these habits are ingrained. Now forming the habits can be difficult, but when you're really clear on the benefits of financial stability, you'll find the willpower to stick with it. I also like that Danika mentioned an opportunity fund. We so often talk about an emergency fund on this show, which is also so important. But life offers us opportunities just as much as it throws obstacles our way. When you have money in the bank,

[00:07:17] you're in a better position to take advantage of these opportunities. Keeping this in mind has helped me prioritize saving, even when I don't have a specific savings goal in mind. I often tell myself, I can't possibly anticipate today the opportunities that will present themselves tomorrow. This is exactly what happened when I bought my house. I didn't really intend to buy a house. I was casually looking out of curiosity and was also thinking about buying an investment property.

[00:07:45] But having cash on hand allowed me to jump on the perfect house at the perfect time. And that's another episode of Optimal Finance Daily. Thank you for your support and for listening every day, of course. We wouldn't be here without your support and the contributing authors. I'll be back with another new post for you tomorrow, where optimal life awaits.