5 tips to build lifelong good financial habits
The end of the year is a great time to reflect on your finances, particularly on what you can do better in the new year. And since 45% of American adults ring in the new year with a resolution, you won’t be alone in planning to make 2017 your best financial year yet.
Here are some strategies to help you improve your finance management:
Start with a budget. Track finances for a few weeks to see where your money goes. Then build your budget based on typical expenditures. Look for easy ways to cut back, like bundling services such as cable and internet or home/auto insurance needs, shopping sales, and finding better rates on credit cards.
Set specific goals. Start by picking a set amount to save or one bill to pay down. Then identify the steps you can take to reach that goal. For example, if you’ve decided to save $1,000 this year, figure out what it will take for you to do that—and then write those steps down.
Track how you’re doing. Research shows that monitoring your progress increases success, so checking in at regular intervals will help you stay on track.
Boost your savings. Make putting money aside automatic. Unless you do it on a regular basis, saving will never become a habit. Set up a recurring automatic deposit into your savings account each month. You’ll never miss money you don’t see.
Create an emergency fund. Emergencies can tank your finances fast. That’s why it’s important to have a stash of cash available for “what if” situations. Experts recommend having anywhere from three to six months’ worth of expenses in reserve. If you don’t already have an emergency account, now is a good time to get started.
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