Four good money habits

Let's be honest: the odds of winning the lottery or inheriting millions from a long lost Auntie Mabel are very slim. If you want financial certainty, it's up to you to get better at making the most of your money.

The very mention of getting into good money habits makes a lot of peoples eyes glaze over but they're your best chance of achieving peace of mind. So if you lie in bed dreaming of taking a career break, buying your own home, or retiring early, listen up. We have picked the top four financial habits to get into that can help you make those dreams a reality.

A note on habits

Firstly though, let's talk about forming habits. Most of us have bad ones - and not just when it comes to money. Breaking bad habits isn't easy - as as anyone can tell you who has made a new years resolution to get fit and eat healthy only to find themselves at the end of January with their knee in a support on the couch eating pizza binge watching Netflix.

Your best chance at successfully breaking old bad habits and forming good ones is to start small. If you want to take the big bang approach, you might it helpful to get support from a professional who can guide and help you achieve the right financial future for you.

Step 1: Spend less than you make and avoid debt

It doesn't matter if your income is big or small, if you spend more than you earn you will need to borrow money just to fund your lifestyle. Once you have borrowed that money, you will start paying interest, so your monthly expenses go up and so begins a vicious circle.

With average UK household debt (that's credit cards and loans) standing at an eye watering £15,400, it has never been more important to take charge of that spending as there is only ever one winner in that scenario - and it's certainly not you.

Make a budget, stick to it, and avoid unnecessary debt. Without this simple foundational habit you'll need to work harder for your money instead of getting your money working for you.

Step 2: Plan for the unexpected

Christopher Walken summed it up when he said "At its best, life is completely unpredictable". Having an emergency fund and insurance to see you through difficult times seems to make sense, and yet most of us still seem to fly by the seat of our pants.

Start putting money aside for those tough times, take out income insurance, and stop worrying about the what-ifs.

Step 3: Make your money work for you

With spare cash comes opportunity - and not just for new stuff. This is where you start turning your dreams into realities, from buying a home to saving for a once-in-a-lifetime holiday or funding your children's education, the possibilities are endless.

Step 4: You will get older, so invest in it

One day you're 25, energetic and invincible and your life is ahead of you, and the next you are a silver surfer with grand kids and a bucket list. It's really hard to imagine getting older, so much so that companies are generating wrinkly avatars of our older selves to help us to connect with who we will be in the future. But here's the thing: none of us are getting any younger.

The problem is that unless you start young and put money aside for your old age, it will very hard to kick back when you want to most. So think pensions: workplace pensions, SIPPs, company pensions, personal pensions, stakeholder pensions and state pensions.

The TL;DR

There are no get rich quick schemes (in spite of what some might tell you). If you really want to dodge life's curveballs, hit your goals, and have the peace of mind that comes with it, then forming good financial habits is your best option. Your free Multiply plan helps you access the FCA-regulated advice you need, when you need it.

We don't need to tell you life changes, so make sure your financial plan changes with it. One of the best habits you can form is to check in each month to keep your plan up to date. We recommend checking in right after you get paid. We can hear your eyes rolling in your head, but all it costs is 2 minutes of your time, so you can do it while you're queueing for a coffee. What are you waiting for?