10 Best Money Habits You Can Develop This Year
The start of the year is a great time to rethink and revise our financial plans, including general decisions like “save more money” or “pay off debt”. Here are some ways to develop more habitual money habits throughout the year.
True savings occur when we deviate from our habits . You may already be doing many (or all!) Of the points below, but for everyone else, this is a reminder that good money habits involve small actions and important changes in thinking.
10. Keep your budget simple
If you’re in the business of personal finance, it’s easy to get to grips with all the apps, charts and financial tools available, and it’s easy to complicate our finance with many budget categories, subcategories, and the like. Take a more minimal approach and it will be much easier for you to stick to your budget. Remember, you don’t have to keep track of every penny to maintain good money habits.
9. Set barriers to passive spending to save more money.
Several “ rules ” you create for yourself — for example, using a 30-day to-do list for your desires, separating things using the “two items for every item available” rule, and focusing on experience rather than possessions — can help preserve more money. to your bank account. You can also use indecision (when you can’t choose between buying two things) as a trigger to avoid buying anything. If you follow your rules a few times, they can turn into a habit of accumulating wealth.
8. Cook at home more often
Cooking at home not only saves money, but it is also healthier. Plan your meals each week (even if you’re on a tight budget ), upgrade your brown bag lunch, and enjoy delicious meals at home without spending a lot . Or mix cash and lunch issues: organize a cash lunch at the workplace , which is part financial support club and part lunch club.
7. Maximize your retirement savings
It’s not easy for everyone, but the closer you get to maximizing your ROTH IRA and / or 401 (k) each year , the better. Over time, the difference will be huge. Whatever you do, start as early as possible . Even just $ 50 a month in total , and if your employer matches your contributions, it’s like doubling your money for free .
6. Make your money automatic
It’s not really a habit, but once you set up your automatic payments and savings , you have the time and energy to focus on your other money habits. With automatic bill payment, investment fees and savings plans, most of your finances can be taken care of like a watch. Just remember to check back regularly to make sure everything is going according to plan. Draw a diagram of your financial network to see how all of your financial services relate to one another.
5. Give up frugal habits that are not worth it.
Getting rid of bad ones is just as important as developing better habits. Some saving tactics don’t really make sense , like driving ten miles to save a dollar on gas. To find out if a frugal habit is really worth your time and energy , start with your hourly income and calculate the “time value” of that modest habit. Find out how much your time is really worth with this calculator.
4. Get rid of bad money habits by understanding how it is formed.
Habits come up the very first time you make a choice, whether it’s charging your credit card or deciding to stay at home instead of dining out. Some habits can also be addictive, but if you know the psychology behind our habits – for example, our need for variety and our sense of importance – we can quit bad habits and focus on the new ones we want to develop.
3. Payment of debt with bonus money.
Repayment of debt, as a rule, is an ongoing activity, but you can speed up debt reduction, taking as a rule to put all the “extra” money ( bonuses , cash gifts, tax refunds, and so on. D.) The expense of the debt. Consider these windfall financial flows already set aside for debt repayment, and you will see your debt disappear much faster than if you had just made your standard payments.
2. Invest in yourself
With each purchase, consider whether it is in line with your personal values and goals ; otherwise, you may be spending too much or simply not on it. Make it a habit to wonder whether you are spending your money on something that spend their time, and are paying if you prioritize that can boost your career or earning potential … or whether they spend on something else.
1. Remember the basics
Spend less than you earn and invest the difference. Pay the full monthly installment on credit cards . Don’t buy what you don’t need . Most personal finance books and articles boil down to the same tips, but we still need them because it’s too easy to go astray. The start of the year is a great time to get back to basics, but set yourself reminders to maintain these good habits throughout the year. Visual triggers , such as writing goals on your credit cards or simply making notes on your payday calendar, can remind you of what matters most to you. Often the little things matter.