Making healthy financial decisions is a lesson that all of us should learn. Unfortunately, most people skipped this class and step into adulthood with zero money management skills. In time, we all form financial habits that work with or against us and every decision we make money wise helps reinforce these habits, whether they’re good or bad. Ideally, we should be able to cultivate the first and let go of the latter, but nothing in life is ever that easy.

If you’ve ever been short on money, unable to pay monthly expenses or drowning in debt, you could probably benefit from reassessing your habits and making the necessary changes to improve your financial situation. This can have a significant positive impact on your future and help you achieve your money goals, be it saving for your first house, investing in your education or simply enjoying the perks of living a financially stable life.

Whatever your money problems might be, there’s always a way to fix them. But you must be willing to put in some work and be consistent with your efforts. And of course, the sooner you start, the faster you’ll see results. Here are some steps you can take to start building better money habits right now.

Analyze your financial issues

When you’re in financial distress it makes sense to search for the fastest and easiest solution to get out of trouble. Many people resort to borrowing money from their friends or family members, or they apply for online loans that can help them get the money they need quickly and without much hassle. While this is a viable short-term solution and, in many cases, the only option available, it’s important to avoid making a habit out of borrowing money. Try to figure out why you ended up in this situation in the first place and what you could have done to prevent it from happening. Finding the root cause of the problem is the first and most important step towards improving your life.

Pay off your debts

It’s never easy to get back on track once you’re already stuck in debt. For most people it’s like a vicious cycle that never ends. But it’s absolutely necessary to pay off all your debts and start with a clean slate if you want to make any financial progress. Otherwise you’ll just keep on struggling to make ends meet. The first thing you should do is paying your credit card debt. Most people fall in the trap of spending more than they can afford and end up paying huge amounts of money towards their credit cards.

Calculate your monthly budget and decide how much you can pay each month to cover your debts. If you’ve been a big spender up till now, it will probably take you some time to become debt-free. But once you’re done with it, you’ll feel like a huge weight has been lifted off your shoulders and you’ll be able to focus on other financial goals.

Live within your means

This leads us to one of the most useful and obvious pieces of advice anyone could receive when it comes to financial health, and that is living within your means. To avoid the situation above, the best thing you could do is restrain from spending more than you earn. Of course, the temptation to splurge on certain things will be hard to resist, but resist you must. Don’t compare yourself to others or try to imitate their lifestyle. You don’t know how much money they are making and how they can afford the things they own. Focus on your own situation and spend according to your possibilities. There’s nothing wrong with wanting more, but if you want to spend more, you must first find a way to earn more.

Establish spending limits

A good way to cut back on unnecessary expenses is by establishing clear spending limits and sticking to them. You should create a set of rules based on your budget and the bad money habits that you want to break and whatever you do, don’t stray from them. Don’t fall for the sales trick. There’s no such thing as saving money by buying stuff that’s on sale. You’re still spending even if the items that you purchase are a bit cheaper. Try not to give in to this marketing technique and think if you really need those products that are on sale or you’re just tempted to buy them because of the discount.

Have a savings account

A savings account is like having a plan B in case plan A fails and you find yourself in a critical situation. With life being so unpredictable, chances are you’ll need a plan B more often than you anticipated. That’s why having some money put aside for unexpected events can be a true life-saver. The most effective way to save money is by having a separate savings account where you can send those extra money you earn. Another useful tip is to set up automatic transfers, so that each time you receive your wage (or whenever you see fit) a certain amount of money goes straight into your savings account.

Track your progress

The whole point of changing your money habits is to help you make better decisions and evolve financially. So, you must keep track of the steps you take and the results they yield. How else would you know if your new money habits are working or not? Remember that learning to manage your finances the smart way is an ongoing process. Some of the new habits you adopt might bring faster and more consistent benefits than others. That’s why you must take the time and analyze your progress as you go. What’s more, seeing that the changes you’ve made helped you move forward will also serve as a motivation and will encourage you to continue on this path you’ve started.