Seeing purchases your friends post on social media can leave you envious – and might also foster a desire to buy a similar item. That can be a problem if your goal is long-term financial freedom, because spending money on items you may not need can derail your plans. Three simple habits can help you stay on track.

  1. Live below your means. Living below your means requires that you discover what those “means” are. To find out, use a budget app, an online financial site, or old-school pencil and paper to track your income and expenses over a month or more. You'll learn how much disposable income you receive and what your spending habits are, and you might be surprised at how your money habits hurt your finances. By spending less on nonessentials, you'll be able to save for the future and develop long-term wealth.
  2. Save for emergencies. By setting aside money in easily accessible accounts, you avoid racking up credit card bills when unexpected expenses occur. Such expenses could include your out-of-pocket costs for trips to the emergency room, repairs to the family car, or patching a hole in the roof. A reserve fund can also help you survive periods of unemployment without incurring additional debt.
  3. Use debt wisely. Necessary debt can generally be linked to appreciating assets, such as your home mortgage, or assets used to generate income, such as a basic car for getting to work or school. Unnecessary debt, on the other hand, might include routine credit card charges or installment loans for depreciable items. Ask yourself whether you can pay off new debt from next month's income.

Making smart financial decisions isn't glamorous or easy, and requires more than a little self discipline. Your reward for persevering: substantial long-term benefits.

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