As the new year approaches, now is a popular time to reassess our habits towards things like exercise and healthy eating to see what changes we can make to improve ourselves. Money habits, however, don’t often get the attention they deserve even though they can have a profound influence on nearly every aspect of our lives. If you’re looking to make some lifestyle adjustments in the new year, why not consider these five life-changing daily spending habits that could enrich your life and your bank account?
As basic as it sounds, if you’re wondering how to save money, making a budget is one of the best things you can do. Who hasn’t asked themselves, “Where did all the money go this month?” or received a credit card bill with a tally that exceeded expectations? Creating a budget with “must” categories (rent, food, transportation) and “want” categories (entertainment and eating out) is the ideal way to track spending and ensure you don’t find yourself out of cash. Remember to include categories for things like retirement savings and an emergency fund and be diligent about subtracting the correct amounts from categories each time you spend. Making a budget may be hard to adjust to at first but it’s a wonderful way to take control of your finances and, more importantly, your life.
Good old-fashioned coupon cutting or planning your weekly shopping around deals can add up to huge savings over time. One daily spending habit you may want to adopt is to leverage loyalty plans like the PC Optimum program to earn points that can be redeemed towards free groceries and drug store items. Be a smart shopper and try to maximize purchases that feature bonus loyalty points offers to earn free rewards fast.
Pay Off Credit Card Balances
Most of us have credit cards and one of the simplest ways to save money is to make sure you pay off your balance each month. If paying off the full balance isn’t possible, aim to make as much of the payment as you can possibly manage. Interest payments accrue at a surprisingly speedy rate, making your purchases more expensive the longer you put off paying for them. How responsible you are at making credit card payments is a major factor in securing a high credit score.
One of the best daily spending habits you can adopt is to give more to your (future) self by increasing the amount of money you direct towards savings. The sooner you start putting money toward retirement and an emergency fund, the more time your nest eggs will have to grow, thanks to the magic of compound interest. Unfortunately, savings are an all too easy responsibility to avoid. The next time you’re tempted to skip topping up your nest egg, remind yourself that making a dedicated effort to prioritize savings is an essential money habit that will go far to ensure a good, long-term quality of life.
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