We set New Year’s resolutions but often they are vague. For example, we promise to save more, spend less and pay off debts. These are really great! But if we’re seriously focused on doing so, we must go one step further and chalk out a proper plan of attack. Understand what you actually want and then pave your way accordingly in doable and practical steps so you reach where you wish to go. Often you may require repeating these steps repeatedly until they become powerful financial tools that help you reach your financial goals.
Discussed below are 4 of many important financial habits in pursuit of wiser saving, spending and also investing.
- Automate – This is the most effective way to free up your willpower for other things. Financial gurus often say that automating savings is darn effective towards your financial health. Once you set up your mind to automate, it’s actually hands off thereafter and thus you’re less likely to mess with your contributions. If you’re stubborn about your financial resolution, you don’t need to recommit every day. Like, if you’re working with an employer that offers 401(k) or any other retirement plan, you actually agree to put away a chunk of each month’s paycheck into savings. Most companies enroll their employees in retirement plans automatically.
- Check your credit regularly – Make it a habit to pull your credit reports from three credit bureaus – Experian, TransUnion and Equifax. They are free once in every year so you can ask for one quarterly as it would give you a chance to check for any discrepancy and thus you can dispute accordingly. Also, it makes sure your credit score is just what you deserve. It’s always good to check your credit reports regularly so you can avoid being a victim of identity theft.
- Keep track of expenses – You can hardly find people who love to track their expenditure though keeping a close eye always helps you get a clear picture of where you stand financially. Are you spending $200 on your Uber rides? Did you spend hundreds of dollars on dining out last month? And if you don’t find it something to feel good about, you may be willing to make a change to your habit. You may find a number of budgeting apps on Internet – both free and paid. Choose any from them and make use of.
- Talk about financial status – Though it is a taboo you must make it a practice to let other know on your financial goals. That doesn’t mean worse complaining or babbling about it at work, dinner table or elsewhere. You must not share your goal and how you’re working towards achieving it with anybody else other than your family and close friends. This even can be shared with your children. Like, you and your spouse may be trying to save for a vacation. Explain to the kids that since you’re working on saving for the vacation, dining out may be restricted for the coming 3 – 4 months.
To conclude, set sub-goals such as contributing as much as you can to Roth IRA. Remember, it always takes time to accomplish lofty plans. So be slow but steady.
This content has been written by Sam. She has 5 years of experience as a content writer and She has written articles for many reputed websites like DX News, Rocketnews etc.