Raise your hands if you have financial goals you're trying to achieve? Great- now leave your hands up if you are struggling to reach that goal no matter how hard you've tried.
We've all been there, and there's no shame in starting over when you stumble from time to time. The following list of helpful tools and good money habits will help you refocus if you've recently fallen off track, or want to start transforming your personal finances.
Nothing brings me greater thrill than walking into a Target or Trader Joes without a plan. Every shiny sale sign I see is a calling card for items that I will love but had no previous need for. Going to the store with a plan is a good money habit to instill in your every day routine to avoid making needs out of wants.
Impulse buys are far less likely when you hone in on the items on your list. These items are your non negotiables, and everything else is unnecessary.
This is one of my absolute favorite, because as I've gotten older and better with money. When you substitute the "name brand" for the store brand you will find you can often save a few spare pennies here and there that stack up rather quickly.
When attempting to save money with less- expensive alternatives, make sure you figure out what you deem as important. The categories I don't particularly care about like aluminum foil, paper goods, cleaning supplies...etc I tend to purchase the generic store brand which costs usually 50-70 cents cheaper. If you know there's a category that is important to you then you can choose to buy the name brand or artisanal option.
I've always said that I'll know I'm rich when I can just set it and forget it. Most of my bills are on auto-pay, and I have my ROTH IRA contributions set to a monthly auto transfer as well.
Why is this important? Setting up automatic transfers for bill payments and saving is a great path to take in order to make strides towards achieving your financial goals.
Sit down with your money goals, and figure out how you can set up sinking funds for any money you have left over after covering your monthly necessities. If you know you have certain costs coming up, auto transferring money into a sinking fund will also help you avoid having to charge these expenses. Cash flow everything you can!
One of the best pieces of beginner friendly investment advice I ever heard was to increase my contribution to my 403b every time I got a raise. Initially I was perplexed and not too keen on the idea. But the truth is, though I didn't get a larger raise to my bi-weekly checks, the increased contribution was gaining way more traction for me being invested.
If you can do well without the extra added bonus cash you've earned (a raise, your tax return...etc) then make those dollars work for you. Put that extra cash into a high yield savings account (I'm a firm recommender of a Capital One 360 or Barclays HYSA). You can also choose to invest that extra money into your ROTH IRA or individual brokerage account.
I think there are many times when people are confused by the phrase "pay yourself first". Especially entrepreneurs who often forego paying themselves for a while as they build their businesses up off the ground.
Staying on budget is a great feat from month to month because of how hectic life can get, however if you want your savings to grow you are going to need to go pay yourself first. Set your savings on auto transfer (coughs *see good money habit #3*), this way you automatically pay yourself first on pay day.
It's way easier to manage your money and live off of what is left rather than trying to go the other way. Paying yourself last means you may reach a point where there is nothing left to pay.
In addition to this good money habit you want to implement into your personal finance journey- let's make an addendum: make sure you leave it in your savings account as well.
I can't tell you how many of my future millionaires are swapping their savings money into their checking account quite frequently. That defeats the purpose of putting it into he saving's account. Unless it is a sinking fund with a particular goal, or a part of an emergency fund being used for an emergency- don't touch it!
It is much easier to save with a separate account set up rather than trying to keep all of your money in your checking account. Ally is a really good financial institution that you can create "buckets" of savings for each financial goal you may be saving for.
Whenever my clients ask me about budgeting and what budget I recommend, my answer is unwavering: Whatever budget works best for your personal finance journey. Instead of suggesting specific budget structures, I offer a more viable good money habit.
You can not restrict every part of your financial well being to focus in on one goal. You are human and will go through human moments. Instead of having everything off limits, focus in on going lean in certain financial categories.
If you need to limit your entertainment fund, or food fund then you know exactly what your limitations are without feeling like every thing is limited. It approaches financial literacy in a healthy manner as you[re approaching your budget and spending routines in a positive manner.
Start with small wins you know will be easy to do well in. For example if you want to have a healthy food budget vs if you want the main basic grocery option that involves more home cooked meals. Figure out which areas you are more prone to be successful in. Can you do at home work outs so you can cancel that gym membership? If you can this would be a better spot to limit for yourself rather than starting in a space where you would have more difficulty cutting down.
The is not only a good money habit to have, but it is also a great way to start celebrating your financial growth. Track your financial progress, not because you re focusing on the negatives or slip ups, but instead to track your success and progress.
I personally use Personal Capital to track my financial progress ,and most specifically it helps me keep track of my net worth.
Set aside some time on a rolling basis, to see how much progress you’ve made towards your money goals. Check in with your accounts to see how much debt you're in, what is your current net worth. When we see results visually, it offers a boost in morale and keeps us focused on the "why". We need motivation and visually seeing how far you've come is a great motivator.
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