12 Good Money Habits You Should Establish for Yourself
Sticking to your budget when you’re surrounded by temptations, from a sale to your desire to get into impulse buying, can prove to be quite difficult. But giving in to such temptations may mean accumulating unnecessary debt that would pull you down further financially. This is when establishing good money habits would come into use as these habits will kick in just when you’re about to give in to splurging on things that you don’t really need.
Here are some key habits that you should practice to help you reach your financial goals.
1. Set your life goals then determine your budget.
Develop your budget based on what you want to achieve in life, such as getting a retirement savings plan, sending your kids to school, or traveling the world. By planning future expenses based on your life goals, you can find the areas where you need more money, change your plans as needed, or find more income streams to make up for the lack of budget. This should be a more satisfactory and fulfilling arrangement for you.
2. Swipe your cards only for what you can afford to pay per month.
Using your credit cards will help you build a good credit history, but only if you pay on time. Aside from ruining your credit score, you will also incur late fees, which is why it pays to use your cards only when you can afford to pay for the monthly dues in your next credit card billing. If you don’t use your credit cards wisely, it can push you to the brink of a financial disaster, but you can easily avoid that by prioritizing credit card payments for each cycle.
3. Make a grocery list based on the season and items on sale.
Don’t overindulge in your cravings when you make your next shopping list. Instead, consider what items are in season or placed on sale to save money from what is often the second biggest source of spending among Americans. Getting into this habit would require meal planning since you have to prepare meals based on the items on sale. It also helps to find tools that will point you to grocery sales or stores offering generous coupons. You can try the clearance section in supermarkets as well to find great bargains in food items.
4. Set up long-term goals.
Consider what major expenses you might have in the future, such as a permanent home, a new car, a long overdue family vacation, or kids’ tuition. List all these possible expenses and compute how much you need to earn and save to achieve these goals financially.
5. Be creative in looking for savings.
You can start collecting loyalty cards, redeeming cash back offers, clipping coupons, buying during clearance season, subscribe to promotional emails, and buying secondhand items. Come up with more fun ways to save money and you’ll be able to save hundreds or even thousands of dollars. This can also become a challenge for you every month as you try to top up your savings from the previous months.
6. Develop a bill payments system to avoid late fees.
Lay out all the bills that need to be paid, organize them according to their due date or urgency of payment, and set up a system to pay them off the fastest. Don’t waste your money on paying for late fees when an organized system can help you avoid such fees by paying for your bills days ahead of their due dates.