When it comes to personal finance, making all the wrong moves can lead to financial disaster. Remember, it’s never too early to start setting yourself up for financial success. Adopt these financial habits now to ensure you have a healthy financial future.
Create a Budget
The best thing you can do for your financial health is to be proactive. Sit down and create a budget that you can stick to. Creating a budget not only helps you stay on track, but it also forces you to evaluate how you spend your money. Once you’ve identified how much money is coming in and how much you’re spending on necessities, you can determine what frivolous spending can be cut out.
Start Saving
According to a 2017 GOBankingRates survey, nearly 60% of Americans had less than $1,000 in their savings account, and a shocking 39% had no money saved at all. Building up a sufficient savings account will provide you with some financial security and a safety net in the event of an unanticipated costly emergency. Aside from preparing for the unexpected, it’s in your best interest to save for the future. Many of life’s big moments come with big price tags, including going to college, traveling abroad, buying a home, and of course, retirement. Saving for these milestones makes attaining them more realistic.
Take Advantage of your Employee Benefits
Many employers offer retirement plans, such as a 401k, in which the employee can save and invest for their own future. To take advantage of your company’s retirement benefits, you should be contributing enough to get your employer’s full contribution match if they make one. When you really think about it, an employer contribution is free money, and who turns down free money?
Avoid Accruing Debt
It’s easy to get a line of credit these days. The average American household has between $15,000 – $16,000 in credit card debt. Many families use credit cards as a way to supplement a lifestyle they can’t actually afford, creating a debt snowball. Don’t forget, when you’re using credit cards, you’re also racking up interest. Instead of relying on credit cards to make non-essential purchases, get in the habit of purchasing only what you can with your available funds. Want to make a big purchase? Start saving.
It can be tempting to spend instead of save, and it’s easier to use credit instead of cash. Practicing healthy financial habits is easier said than done, but it’s critical for your financial future. With a little bit of self-discipline, you can ensure you and your family stay on track for financial success.