What is one financial habit that will make you smarter with your money?
To help you build smart money habits, we asked financial experts and business leaders this question for their best advice. From paying yourself a weekly allowance to reading content from money experts, there are several financial habits that you can build to help you become smarter with your money.
Here are 14 financial habits that will make you smarter with money:
You don’t like to budget, so pay yourself an allowance instead. You work hard and you shouldn’t deprive yourself of the little things that bring you joy. Just review your last three months of spending to determine how much you can spend each week on what you love. Then set up a second checking account for your allowance and automatically transfer it into that account every week. That’s the debit card you’ll carry to treat yourself with the splurges that make you feel good about managing your money. It’s a smart way to budget, made even smarter by rewarding yourself for your success!
Jonathan Vander Werff, CFP®, My Financial Coach
The value of money in time is never stable, and thus it pays off to reinvest every dollar. It also means that the payment in future is usually worthless today. Knowing that and applying the right discounting factors can help plan investments and savings in the multi-year horizon. It also makes people aware of inflation and the power of compounding.
Michael Sena, SENACEA
Buying in bulk ensures that you save money. Wholesale warehouses like Costco ensure you don’t have to return to purchase more any time soon. Since warehouse stores pay fewer staff members, they can afford to charge you less. Finally, remember business purchases are tax-deductible. Between buying in bulk and writing off your business purchases at tax time, you’ll be financially ahead.
Janice Wald, Mostly Blogging
Sometimes I like to imagine that I can time the market or read the news for an indication that a crash is coming and that I should wait to invest until AFTER this crash. The problem with this strategy, however, is that very few people can successfully time the market, and the time I spend NOT investing costs me the gains I could have made HAD I invested. The solution to this is to invest a set amount each month so that any changes in the market are averaged out. This saves you from the stress when the market goes up or down, as it all averages out in the long run.
Kristine Thorndyke, Test Prep Nerds
Your refund is a great way to pay off the balance on any business credit card you use. Business credit cards are great at covering expenses, including office supplies and business lunches. And paying your bills on time will help raise your business credit score, allowing you to acquire more credit later down the road to cover company cell phone bills or travel expenses. We love the cash back rewards our business cards receive because we can use them to pay off the balance, spend on additional expenses, or buy our employees a small gift to show our appreciation and boost their morale.
Chris Gadek, AdQuick
A lot of financial planning is simplifying your relationship with money and implementing sustainable financial practices that you can stick to. A simple example of this is automating all your recurring payments, be it utility bills, savings, or loan payments so that can save precious time and energy every month that can be better utilized for other financial decisions.
Demi Yilmaz, Colonist.io
If you want to be smarter with your money the first step you should take is to know where your money is coming from and on what do you spend it. At first glance, writing down all transactions seems bothersome. But it quickly gets in your blood. You can control your finances using a dedicated app (there are a lot of them), an Excel sheet, or even a regular paper sheet. By knowing where your money goes, you can discover what you can save.
Natalia Brzezinska, PhotoAiD
Dave Ramsey is one of my favorite financial coaches, and he recommends carrying cash rather than using your debit card to make every purchase. Once you create a budget and know how much extra spending money you have, using cash will help to keep you from overspending. With cash on hand, you’ll always know exactly how much you have to spend.
Rachel Blank, Allara
Invest your money into a retirement account such as a 401k, IRA, or a defined contribution plan. These plans typically can be set up individually, or through your company at times, and are a great way to save without really even thinking about it. Many people have a portion of their paycheck deposited into one of these accounts, and from there it’s automatically invested into mutual funds. The type of plan and location of your investments depends on how you configure your account, typically based on your age and risk tolerance. Overall, retirement accounts are a great way to set aside money for your future and will help ensure you’re saving for retirement.
Joe Spector, Dutch
You can sign up for an investing app so that you can automatically save and invest your money without having to think about it. For instance, with the Acorns app you can link up your bank information to automatically deposit a certain amount every month. The app will take care of this on its own and you can allow this money to build over time.
Drew Sherman, Carvaygo
Loans and the monthly installments that come with them are just another way of stepping up in life and even prove essential when your goal is to push forward constantly. Interest rates often make the difference between you taking advantage of the perks of taking a loan and loans taking advantage of you, so remember to keep a check on the interest you are paying on your various loans. Remember, even a slight difference adds up to you losing a lot of money over time.
Eva Taylor, WP Buffs
One financial habit for smarter money handling is to delay impulse purchases. When you get the sudden urge to buy an item, instead of making an instant purchase, wait at least 48 hours. If after two days, you are still thinking about the item, then close the deal. When items we originally had no intention to buy catch our eye, we often forget about them after leaving the store and waiting a day or two, whereas we often experience buyer’s remorse if we give in to unnecessary purchases. Delaying the sale will save you money and free your wallet from sudden whims.
Carly Hill, Virtual Holiday Party
We play havoc with our finances when we keep shifting the line that divides our needs from our wants, our essentials from our luxuries, and our requirements from our perks. One way to keep this line intact is to make a rigid list of everything you spend on and divide all the items on it into needs and wants, with honesty. Once you have this list in hand, you can decide which excesses you really want to give in to and which ones you can keep in check. After all, the smartest way to save money is to get smart with how you spend it.
Mary Jurgensen, Gary and Mary West PACE
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Michael Green, Winona