5 Small Habits to Improve Your Financial Health
Looking to take control of your personal finance management? Want to end each month with more money in your long-term savings accounts? Try these five simple lifehacks that will improve your budgeting and amplify the effects of your income.
1. Set aside savings at the beginning of every month
Of course, everyone knows that you should be setting aside money every month for emergencies, long-term savings, and other savings goals. However, it can be tough sometimes to find the money at the end of every month after spending money on bills and other expenses. Ensure that you’re meeting your savings goals by setting your money aside at the beginning of every month. You’ll train yourself to rely on less each month for discretionary spending, and your savings will grow over time into a healthy amount for your financial security.
2. Keep a week-long spending diary
It’s easy to fall into bad spending habits that can go unchecked for months at a time. To perform a spending “check-up,” keep a diary of every cent you spend for a full week. At the end of the week, do some calculations to see exactly how much some of your expenses are costing you. For example, you may not be aware of the impact of your daily $3.50 coffee before work; this type of consistent spending ends up costing almost $1,000 over the course of a year. Is that expense worth it to you?
3. Take advantage of auto-pay options or schedule payments
One financial goal that anyone can manage is the avoidance of silly expenses; costs and fees that can be avoided with a little personal responsibility. The silliest expense we can think of is the penalty fee that is charged when you forget to make a regular payment or overdraft an account. Many banks and companies offer auto-pay features that can ensure that you never lose money on a late payment. For other regular expenses where auto-pay isn’t possible, set a monthly reminder in your calendar a few days in advance. A penny saved is a penny earned, and these monthly reminders will help you save several pennies over time.
4. Avoid redundant spending
There’s nothing shameful about spending money on the things you love. If you are a movie fanatic, a Netflix or Amazon Video account is probably a worthwhile expense. However, it’s important to identify expenses that are made redundant by other spending. Your Netflix account could allow you to stop spending money on a cable television package; don’t spend money on both if you’re only going to use one!
5. Invest in money-saving spending
It’s well-known that in some cases, you have to spend money to save or earn money. Nowhere is this more true than at the grocery store, where increased spending can actually pay off in the long run with massive savings. The key here is to examine the cost per unit of each item; most grocery stores display this in font on their product tags. $10 on a pack of toilet paper may seem like a lot, but when it brings the cost per unit down to 25 cents it ends up being a much better purchase than an 8-pack of toilet paper for $4.