Our habits can either help us or hurt us from reaching our financial goals. For example, someone’s frequency of ordering take out for dinner can be hurting their wallet, but most importantly, may be setting them back from achieving their goals in the long run, such as the goal of retirement. Don’t get us wrong—it is okay to splurge every now and then, and making a few minor purchases will not make a huge difference, but there may be some habits in everyone’s life that, by tweaking them slightly, can help them reach their goals faster.
Reviewing our financial habits can help to make us aware of what is working, what’s not working, and what new habits we might want to try this year. Below are a few good financial habits to help you get started:
Set a Budget
This financial habit is very important as it helps us understand the amount of money we bring in and how much we are spending each month. It keeps us conscious of the money moves we’re making every day. So, for example, if you are seeing that you are spending a lot of money on buying clothes, you can make an effort to pull back on those expenditures and give yourself a monthly budget that will help keep spending in check and your saving plan on track. You can remind yourself to review your expenses and budget each month by setting a reminder on your calendar.
Contribute to an Emergency Fund
Imagine if something unexpected happened and you needed to pay for a large bill. While we do not wish for anything unexpected to happen which would cause financial hardship, we do encourage everyone to have an emergency fund. This creates a nice financial buffer just in case it is needed and should help you feel more prepared. You can even set up an automated transfer from your checking account to your emergency fund when you get paid each month so that you don’t even have to see the money coming and going. That way, you won’t miss it.
Regularly Consult with a Financial Advisor
One habit that can help your finances in the long run is to consult with a professional financial advisor. Regularly reviewing and updating your financial plan with an expert can help to keep you on track and make the most of your money. Some people might need a consultation monthly while others might only need one every 6 months.
RELATED: Read tips to reassess your 2022 financial situation.
Pay Off Credit Card Debt Monthly
One reason many people fall behind financially is due to credit card debt. Having a credit card is not a bad thing, but not paying it off each month can have consequences. This is because the interest payments can add up and can eventually have a negative effect on your credit score. Ensure to plan for the payment each month.
Don’t let your spending habits hinder your progress toward achieving your financial goals. By evaluating and by reminding yourself of what habits might help you get to your goals faster, you are one step closer to the finish line.
If you have questions about this information or your overall financial plan, call us today at 412-630-6000. Our experienced financial advisors are here to help.
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