Have you ever found yourself procrastinating on something you know you "should" do? And when you finally get around to completing that task, you realize it actually only took a few minutes. And then wondered why you put it off for so long? That can be the case with some of these awesome financial habits.
These smart habits are the ones everyone knows they should do, that don't take very long to establish, and yet so many people avoid them. Here we take a look at five awesome financial habits and hopefully encourage you to make sure you get them done.
An automatic savings rule
One of the best things you can do to make sure your finances are in good shape is pay yourself first. The first step is to create a budget detailing all of your income and expenses for a specific period of time (usually per month). Hopefully, you have more income than expenses, and the money that's left over can be used to save or pay off your debt.
Pay yourself first means you pay yourself at the beginning of the month instead of putting the rest in your savings account at the end of the month. When you save at the end of the month, you somehow never seem to have any money left over. The best way to save is to set up an automatic savings rule every month. find one Savings account with high return and create a recurring transfer from your checking account every month. It is important that you have a separate savings account. This makes it harder to withdraw money unless it's a genuine emergency.
Another great financial habit is recurring investments. Attempting to time the stock market is a common rookie mistake – A much better idea is to set up a recurring transfer from your checking account. This is called Dollar cost averaging and is a great way to minimize the risk of investing all your money at a peak for the market. The same applies here as when setting up a separate savings account, setting up an investment account also applies. This is separate from the account you use for your monthly expenses. This is a great habit to start with.
Automatic bill payment
Setting up your bills to pay automatically is another great financial habit you can do in just minutes. This is important for two reasons – the first is that late fees and interest on missed payments can have an undue impact on your budget. It is very important to avoid these fees and interest. The second reason is that it frees you up to do other things with your life. Putting your finances on autopilot is a great financial habit.
Before you set up automatic bill payment, you should make sure you have enough funds in your account. Have a small amount of extra money in your checking account as well emergency fund can prevent you from overdrafting your account (and being charged further fees). Account notifications can be a great way to ensure you aren't being billed for unnecessary fees.
There are many different types of account notifications. You should set them up on all of your bank, credit card, and other financial accounts. You can receive notifications when your balance drops below a certain level. Notifications are available when your statement is due, when a payment comes in, or when your account shows suspicious activity. You can also choose to be notified by email, phone, or SMS. Configure your account notifications in a way that is most productive for you.
Get the Mint app
One thing that can help you keep track of all your finances is the Mint app. Available on Google Play Store and Apple App Store, another great financial habit to download the Mint app. Make a habit of checking the Mint app a few times a week.
You can use the Mint app to review all of your different financial accounts in one place. You can also categorize your monthly expenses and see how they fit your budget. Ignoring your finances is the first step toward potential financial distress.
The final result
If you've put off some of those financial habits, now is the time to adopt them. As the old saying goes – the best time to plant a tree was 20 years ago; The second best time is today. Don't waste any more time without making sure your finances are in tip-top shape.
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Dan Miller (93 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a website that helps families travel for free/cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.