Resolve to Replace Your Bad Financial Habits
We all have at least one bad habit when it comes to our finances, whether we realize it or not. The beginning of the year is the perfect time to identify financial weak points and replace them with productive ones.
Identify your bad habits. Sometimes this is easy—for example, you may be ignoring a big stack of bills sitting on the table. Other times it is more difficult—perhaps the habit has become so ingrained that you do it without thinking twice. You might recognize a few of these:
- Paying bills after the due date
- Paying only the minimum payment on bills
- Putting off saving for retirement or for a rainy day
- Taking on debt to pay for something you don’t currently need
Try to figure out what’s driving your behavior, so that you can change it. You might buy big-ticket items when they’re on sale because you want to feel like you’re “saving” so much. Foster a similar feeling of accomplishment by investing the money into a retirement account.
Aim for healthy financial habits. Budgeting is a great place to start, but also consider the following mix of behaviors and objectives that can help keep your finances in order:
- Pay bills on time. In addition to avoiding late-payment fees, this also helps your credit score!
- Make paying down debt a priority, rather than accruing interest.
- Build an emergency fund. Having 3-6 months’ worth of living expenses in savings can help cushion the blow from a financial setback.
- Save for retirement.
- Plan your large purchases. To help prevent impulse shopping from draining your budget, resolve to wait at least one day before buying anything that costs over a dollar amount that makes sense for your budget.
Balancing what you “want” to do and what you “should” do with your finances is never easy, but it’s important to take steps to turn your bad financial habits into positive, productive ones.