Each New Year, do you resolve to finally get your finances in order, tuck away a respectable amount in savings, and practice better money management, only to fall away from your resolutions and end that year in the same financial situation? If so, it’s time to make 2023 the year you learn better money management and set yourself up for success. Get ahead of high credit card debt, stop running out of money between paychecks, stop spending on things you don’t need, and finally save enough to pay for vacations so you don’t have to charge them to your credit card.
If you’re ready to replace self-sabotaging money habits with new practices that can help you finally get ahead, this week’s blog post is for you. You can also order one of my ‘Boss Babe’ productivity boxes from last week’s TalkShopLive episode with an included discount so you can get very organized for the new year!
Without further ado, here are my Top 6 Money Habits to Break in order to budget, save, and create the life you want. There’s no time like the present.
1. Postponing creating a monthly budget
If you don’t have a budget showing your total monthly income and all expenses, you won’t get far with saving. Create a monthly budget using online templates or use a budgeting app which can guide you on the process, track spending, and even send notifications for upcoming payment dates. I like to write down every dollar I make along with every bill and each day it’s coming out of my account.
2. Paying for everything with credit cards
When you’re struggling financially, it’s almost a given that you’ll have to charge many of your purchases, from gas to groceries, to a credit card. While it makes sense to pay monthly bills online with your credit card, set aside enough cash from each paycheck in labeled envelopes to cover groceries, eating out, and other daily expenses where you can pay in cash. I actually bought a budget planner with cash envelopes off Instagram, and I LOVE it. Cash is king no matter what anyone says. Keeping cash ON HAND helps you really take stock of what you’re spending on and how frequently.
3. Making only the minimum credit card payment
You may think you’re freeing up money each month by paying only the minimum payment due on your credit cards, but in reality, you’re only extending your debt misery — often by several years. You could even end up paying hundreds of dollars extra in interest! To pay off credit card debt faster, always pay more than the minimum payment each month. Meanwhile, stop charging purchases on your credit card unless you can pay off the monthly statement balance each month.
4. Putting off opening an emergency savings account
If you don’t have emergency savings, you’ll have to charge unexpected expenses to a credit card to prevent major drain on your accounts. Stop putting off opening an emergency savings account! You can open a fresh savings account with as little as a $25, $50, or even $100 initial deposit, then allocate an amount in your budget to deposit on a monthly basis for emergency savings and stick to it. To build it up even faster, you can automatically have money transferred every single week into it. I do this method weekly with $300. To make saving as painless as possible, contact your workplace and establish a set amount from each paycheck to be direct deposited into your separate, emergency savings account. That way you’ll barely notice and won’t be tempted to let your saving goals slide. You may even be able to manage this through your ADP or payroll app.
5. Racking up ATM and cash advance fees
Hitting up the closest ATM for a withdrawal or credit card cash advance may be convenient, but if you do so often, you’re racking up the ATM bank’s fee of a few dollars or more in addition to your own bank’s fee. Every time you take out a credit card cash advance, you’ll usually pay a cash advance fee AND be charged interest on your advance that’s higher than the card’s usual rate, which begins to accrue immediately without a grace period.
6. Ignoring your credit report
To stay on top of your credit score and work on raising it, you need to monitor your credit report at least every few months. You can order a free copy as often as once a week at AnnualCreditReport.com or download Credit Karma’s App to view it instantly from your phone, penalty free. You also can utilize Experian Boost to bring up your credit score, mine went up a lot. All you have to do is link all your bank accounts and it will scan your accounts for monthly payments.
Finally, find time for joy! If you really want to get out of debt and plan your dream trips, plan ahead and make sure that you’re staying on track with your other goals. Start that side hustle to earn extra cash and get away from the time sucks of social media and TV binging. It’s never too late to begin!