7 Best Financial Habits That Will Change Your Life ...

1. Treat Your Savings Account like Another Bill

Regularly depositing money into a savings account is one of many financial habits that will change your life. Some people get into a routine of paying bills and they forget to plan for a rainy day. A car repair, a job loss or an illness can have a tremendous impact on your personal finances. With a cash reserve, you might be able to alleviate some financial headaches. Set aside 10% of your pay each pay period.

2. Ask Yourself, “do I Need It?”

To reduce frivolous spending, never buy an item on impulse. It doesn't matter if you stumble upon a great sale. Leave the item in the store, go home and sleep on it. In all likelihood, you will forget about the item once you leave the store. But if the item stays on your mind, consider whether you really need it. If you do – and you can afford it – return and make the purchase.

3. Give Yourself a Splurge Allowance

You work hard and there's nothing wrong with enjoying the fruits of your labor. Each pay period, set aside a certain amount of money for splurging. It doesn't have to be a lot. Use the money to get your nails done, enjoy a massage or purchase a few inexpensive items.

4. Make One Extra Mortgage Payment a Year

Did you know that one extra mortgage payment a year can pay off your loan eight years sooner? Not only can you eliminate the debt faster, you'll save a ton on interest charges. For this to work, you'll need to make a double payment once a year, and then tell your mortgage lender to credit the extra payment to the principal only. Or you can increase each mortgage payment by 1/12, and indicate that you want the extra money applied to the principal.

5. Ditch Credit Cards

They are convenient and easy, but they can also get you into trouble. A credit card can help you establish credit and pay for emergency expenses. However, only use a credit card if you can afford to pay off the balance within 1 to 3 months.

6. Use Credit Cards That Offer Rewards

Then again, maybe you hate carrying around cash. If you prefer to use a credit card for everyday purchases, such as groceries and gas, get a credit card that features a rewards program. For every dollar you spend, you can earn points redeemable for gift cards, cash, statement credit, travel and much more. Just make sure you pay off your balance in full each month.

7. Reduce Your Housing Expense

If your rent or mortgage is more than 28% of your gross monthly income, perhaps it's time to downsize. There is nothing fun about being house poor. If the majority of your money goes to the house payment, there might be little left for savings or enjoying life.

You don't have to be a financial expert to understand good money management. It doesn’t matter if you’ve made mistakes in the past. If you resolve to make smart choices going forward, you can get your money on track. What financial habits have changed your life?