3 Money Management Habits to Start Doing in 2019

Having a solid set of financial skills allows you to enjoy life just a little bit more. If you want to be good with money, you need to form a few good financial habits. Money management skills help improve a lot of things like your bank account balance and your credit rating.

Here are a few financial habits you can start forming as early as now:

Save up for your retirement

The easiest way to start being financially savvy is to always think of the future. What do you think would happen when you hit the age of retirement and have nary a penny to your name? Does that mean that you’ll be relying entirely on your monthly pension to live out your golden years?

Being able to live comfortably even when you retire should be one of your motivating factors to help you be more careful with your finances. Set aside some money for your retirement through a Roth IRA or a Roth 401k. While most financial experts recommend saving 10% to 15% of your income for retirement, there are different factors that need to be considered such as your current age and when you plan on retire. These factors can have an impact on how much you’ll need to set aside in order to hit a target amount for retirement, so it’s best to use a 401k calculator.

Have a budget and stick to it

Knowing how much you need to spend and where you need to spend it is important in order to become better at managing your finances. Creating a budget allows you to avoid overspending on food and groceries for example. Having a budget also allows you to monitor whether you have extra money to use on fun and entertainment.

Tracking your expenses using a budget sheet is important to make sure you stay on top of your finances and do not get sidetracked by unnecessary purchases or subscriptions. 

Reduce credit card spending

One of the easiest ways to ruin your finances is to rely on plastic money. While a credit card does have its advantages, having a credit card might not be a good idea to keep on your person at all times if you’re not good with money.

If you run out of money, you could always use a credit card to pay for your expenses. Paying the credit card company for those expenses is a different story. You could end up potentially paying more than the value of the purchases you made. A lot of credit card companies charge steep interest, or hit credit card owners with hidden fees, or monthly or annual charges, which can slowly creep up and leave you in an even bigger predicament.

It’s always better to try and pay for purchases with cash as much as possible. Alternatively, you could also look for credit cards with no annual fees to help you save on credit card expenditures.

Being financially savvy takes a lot of practice. By consistently applying these habits, it will become easier to manage your finances and you will be less prone to making impulse purchases.

Join our newsletter

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Leave a Comment

*