Having a financially savvy mindset is not an inherited trait. You have to work hard to become financially savvy. And most importantly, you have to dedicate time and effort into building a budget and sticking to it.

Once you recognize the importance of financial stability, and you accomplish the steps needed to achieve this goal, you will have honed your mind into that of a financially savvy genius.

Here are three traits and skills that all financially responsible people have in common.

1. They Hedge Against Risks

Financially savvy people always research insurances and financial protections that may save them money in the long run. Though car insurance, life insurance, or mortgage protection insurance may feel costly at the time, having the proper insurances in place will only benefit you.

Sometimes car accidents, untimely family deaths, injuries, illnesses, medical emergencies, natural disasters, or some other type of catastrophe at home, can appear out of nowhere, and they can cost a fortune. Paying for these accidents out of pocket can easily derail a strict budget. In fact, according to a Harvard study, most families are one financial catastrophe away from absolute bankruptcy.

You will be happy to have protection set up beforehand in case life hits you with unexpected grievances. Financially savvy people are always prepared for the worst, and they never risk losing copious amounts of money in unexpected circumstances.

 2. They Are Consistent With Their Expense Records

To take control over your expenses, you must know exactly how much you spend on a daily basis. Financially savvy people never swipe their card aimlessly or spend cash without making a note of it. It helps to see all of your expenses recorded in writing so you can visualize how much money you actually spend.

Sometimes small expenses, like coffee or magazines or snacks at the gas station, seem trivial at the time. What is the harm of a couple dollars here and there? But a coffee every day adds up to hundreds of dollars over the course of a year.

Recording every single daily expense forces you to account for everything you buy, thus you can construct a realistic yet effective budget to keep your spending in check. Budgeting can be difficult at first, but after a while it becomes a habit and you will find it easy to manage your expenses.

3. They Are Not Too Hard On Themselves

Budgeting can be stressful, and a few impulse purchases here and there can damage your morale. Financially responsible people understand the importance of confidence and drive.

Dwelling on the past will not make money magically reappear in your bank account, but learning from your mistakes will help you prepare for future situations.

It is also important to avoid creating an overly strict budget. Setting unrealistic financial goals only increases stress and causes you to deprive yourself of things that bring you pleasure. Indulging once in a while is good for the soul, and it makes you appreciate those special purchases more.

Budgeting may even become easier when you look forward to treating yourself with some of your hard-earned money. As long as you splurge on meaningful purchases and avoid frivolous spending, you will reach your financial goals while maintaining optimism.