Are you charging things that you can’t pay for? Are you having problems making ends meet? Do you know someone with unhealthy financial habits? If so, this post is for you. Everyone knows what you do today will affect your tomorrow. So, why continue on an unhealthy path? Yes, sticking to a budget is tough, but it is worth the effort. Research suggests that it takes at least 21 days to form a habit. So, make a financial resolution to implement one or more of the 9 healthy financial habits listed below as soon as you can.
CREATE AND STICK TO A BUDGET: It is easy to break the budget when you don’t have a clear picture of where your money goes each month. So, keep track of all of your expenses for a day, then keep track for a week, then a month, and eventually it will become a healthy financial habit for you. Next, review your expenses and reduce or eliminate your wants, and focus on your needs. Finally, subtract your expenses from your income, set aside savings for emergencies, and only spend the amount remaining. Yes, only spend from the amount remaining. Creating and sticking to a budget is important to your financial health, and is necessary if you want to turn this tip into a healthy financial habit.
USE A FREE BUDGETING APP: Sticking to a budget is tough and time consuming, but it is worth the effort. As you strive to stop charging things that you can’t pay for, keep in mind that tracking your expenses and sticking to your budget can help you eliminate possible late fees and past due payments, and who doesn’t want to keep their money. If you enjoy doing most things on your phone, look into using a free budgeting app such as GoodBudget, PocketGuard, Personal Capital or Mint.com. Budgeting apps save you time while working on your budget by automating the process. These apps may also help you learn financial habits and most will alert you when you make a budgeting mistake. Sticking to a budget is important to your financial health, and is necessary if you want to turn this tip into a healthy financial habit. Visit our website at www.apprisen.com for other free financial tools.
REVIEW YOUR CREDIT REPORT: If your goal is to get financially healthy and establish healthy financial habits, then review your credit report for errors at least annually, and then work to correct them. Unfortunately, mistakes or fraudulent activity on your credit report may lead to declined credit, higher interest rates and may even prevent you from getting certain jobs that require you to have a satisfactory credit history. So, examine your free credit report at least annually for inaccuracies and fraudulent activity, and then work to correct any errors. Looking for ways to IMPROVE your CREDIT SCORE, review our Credit Score Makeover Series: HERE
SIGN UP FOR A PERSONAL FINANCIAL EDUCATION SESSION: Does any one of these quotes sound like you: “I know I make enough, I just can’t seem to budget”. “I’m behind, I can’t get caught up. I have no idea what I spend monthly on certain items”. “I don’t know when things are due; I just pay them when the bill comes in”. “I’d like to be able to save for a home (college, wedding, baby, etc.) “. If so, the Personal Finance Education session is for you.
During the Personal Financial Education session our certified Financial Services Specialist will:
- Review your personal cash flow to understand your financial situation.
- Help you develop a paycheck to-paycheck budget so you will know when to pay bills based on due dates and pay dates.
- Help you establish a savings plan and show you how compound interest increases your savings.
- Review your debt-to-income ratio and compare those to recommendations in case you are interested in obtaining a new loan.
- Create a personal balance sheet so you will know your personal net worth.
- Generate an action plan to achieve your financial goals.
The session is offered in the office, over the phone, or online. Call 1-800-355-2227 or visit us online at www.apprisen.com to discuss your financial concerns, and move one step closer to developing healthy financial habits.
REDUCE YOUR CREDIT CARD DEBT: Reducing your credit card debt takes you one step closer to financial health. Your amount owed contributes to 30% of your credit score. So, the most effective way to improve your credit score and establish healthy financial habits to kick off the New Year is to reduce the balances on your credit cards as well as any other revolving debts. Avoid quickly dropping this resolution by making small changes or increases to your minimum payment. Simply pay a tad bit more than the minimum required each month, and pay more once your situation improves. If you are struggling to manage your credit card debt, please contact our office for a free comprehensive money management session (credit counseling session), to discuss your options.
INCREASE YOUR INCOME: Another healthy financial habit to kick off the New Year entails increasing your household income. Get a higher paying job; help a family member get a job, work overtime, look into a 2nd job, or a part-time job. For the talented among us, turn your hobby or talent into a business. Increasing your income maybe tougher to do when you work on commission, work part-time or rely on overtime to make ends meet. So, be conservation when estimating your income, and build your budget around the lowest income expected during the month.
CONTRIBUTE TO SAVINGS REGULARLY: Savings can help with sudden income changes as well as health and financial crisis. If possible, save to the point where you have at least 3 months of living expenses in savings. As your financial situation improves, attempt to save 6 months of living expenses.
COMMIT TO MAKING ALL YOUR MONTHLY PAYMENTS AS SCHEDULED: Your payment history contributes to 35% of your credit score. Your past due or delinquent payments, and accounts in collections have a major negative impact on your credit score. The timely repayment of your debt is one of the most important factors in your credit score. So, resolve to pay your bills on time, even if this means getting a part-time job.
REDUCE YOUR MONTHLY EXPENSES: Eliminate monthly expenses that are not needed. Healthy Financial Habits to Kick Off the New Year includes looking for ways to cut cost by canceling things such as gym and other memberships. Also includes the possibility of bundling your auto and homeowner’s insurance or canceling newspaper and magazine subscriptions. I think we would all cringe at the thought of reducing or eliminating our cell phone plan. So, don’t beat yourself up over your cell phone plan. However, looking for generic or lower cost options when shopping for something other than a cell phone plan may come much easier. So, focus on those things first. Make reducing your monthly expenses a priority and your level of debt will shrink.
Unhealthy financial habits occur when you seem to have an endless list of wants, but a limited amount of resources. This list of tips/habits should help you develop a plan that works for you and your household. As mentioned before, research suggests that it takes at least 21 days to form a habit and at least 2 months before the new behavior becomes second nature to you. Creating and committing to a plan you helped to establish improves the odds of your success. So, take the time to set realistic plans for meeting the needs of your household with these 9 Healthy Financial Habits in mind. You can do it!
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