I used to put off big lifestyle changes like how I handled money until the first of the year. Somehow, I’d manage to convince myself I’d be more likely to stick to it if there was some sort of big New Year’s resolution slapped on it; as if it came with required accountability. It was ridiculous and of course, it never worked. By the time the first of the year came around I had allowed bad habits to continue for months and I’d lost the strong motivation to get things in shape. The cycle would repeat itself the next year and ’round and ’round it went.
That went on for years before I eventually accepted that if I was going to develop good financial habits I was just going to have to start when the motivation hit even if that meant April, July, or October. If you’re feeling motivated to change your financial habits then there’s no better time than right now.
Take the time to learn about money now and get on track. Below is a list of good financial habits to help you get started.
Start a budget
It’s not hard and there are templates everywhere online for getting started. If you’re new to budgeting, start with the basics and list the most important things first like your mortgage, electric, groceries, etc. If you’re going to build good financial habits you need to know how much money you have coming in and where it’s going.
Check your credit report and score every 4 months
Your credit is important and should be taken very seriously. Your ability to do a lot of things like buy a house or a car is dependent on your credit score. Other things like your ability to rent a car or even get a job can be negatively affected by your credit score. Your credit score is used by lenders to determine if they think you’re a good candidate for a loan so it’s important to keep it in good shape.
There are three main reporting agencies (Experian, Equifax, and TransUnion). You can get your credit report from each agency for free so every year I go to annualcreditreport.com and get them. I pull one in January, one in May, and one in September. If you’d rather, you can pull all 3 at the same time and review your credit once a year. I just prefer to do it more often. I only pull my score once a year because you usually have to pay for it but it’s pretty cheap.
After you get your reports review them for accuracy and look for errors. If there is any false information on your credit report, contact the appropriate credit bureau and dispute it / report it.
Make a financial plan
Once you have set a budget and reviewed your credit report you can begin to develop a plan to help you manage your money. Start with a plan to get out of debt. It’s hard but you need to tackle it head-on. How much do you owe? Who do you owe it to? Contact your creditors and discuss your debt because you’ll find that a lot of them are willing to settle for a much lower amount just to collect something and close the file. If you need to, pick up a second job or monetize a hobby to earn additional income to pay off the debt. Here I shared a list of ways that homemakers can earn extra money.
In your financial plan also figure out how you’re going to start building a savings account. This helps you prepare for emergencies, save for a down payment on a home, or buy a car. You can also start to plan investment accounts for future savings.
Record your bills and track them
You should know exactly when to expect your bills each month, when they are due, and how much they typically cost. Schedule a time to pay your bills in your planner and track them in a budget tracker spreadsheet, you can download mine in my subscriber-only resource library (subscribe in the blog footer if you’re interested).
Once you’re used to planning and budgeting for your bills put them on automatic payments. We have a separate checking account dedicated solely to paying bills. We know how much our bills are each month so we transfer enough to cover bills (plus a little padding just in case) and let everything auto-pay.
Let go of comparison
It’s hard, I know, but you have to learn to let go of comparison when it comes to financial status (in all things really but, focus). You’ll never get ahead if you’re competing with others for short-term wins. You need to think about the long-game, about your future, and about the kind of retirement you want to have one day because that’s what is really important.
Do you have any financial habits to add? Drop them below and don’t forget to pin this to your budget boards!