Like a regular morning workout, some habits you don’t want to break but put into practice. Your financial health is no different. Here are the most powerful additions to your money and credit routine that can help you not just get ahead but stay strong. You may already be doing a few, and if so, fantastic. Keep it up. Now consider integrating the rest into your life as well. All are easy and none require any special equipment.
Take a beat before buying
Making the occasional impulse purchase without weighing its necessity or affordability. is normal, but do it too often and your budget will be thrown out of whack. Give yourself time before buying by taking a beat. When shopping online, make a point of adding the desired items into the “save for later” section. If you’re in a physical store, walk around for a while. Review the funds in your bank account, think about upcoming essential bills. If the item remains a must-have and won’t end up as unmanageable debt, return and buy. Odds are you won’t go back for everything.
Create a monthly net worth statement
A net worth statement is your chance to see how you are doing financially. On a monthly basis, tally up all of your liabilities and subtract them from your assets. A negative net worth can be alarming but if you are actively working toward closing the gap, you’re going in the right direction. Consider reasonable ways to shorten that timeframe, such as spending less or earning more. If you are already in the black, grab this opportunity to analyze where you’re keeping your money, and decide if you want to use or invest it.
Integrate money into your conversation
A 2021 Fidelity study found that 24 percent of people are often frustrated at their partner’s money habits, but avoid discussing them to keep the peace. If you’re among them, change course. Instead, make talking about spending, saving, charging, and goals a regular part of your conversation. When a problem comes up, address it immediately. No one wants unpleasant surprises, and hiding them usually results in arguments. Develop a budget together, too, so you’re both on the same page.
If you wait until the end of the month to set funds aside, chances are you will run out of money first. By far the best course of action is to determine the amount you have to save based on your budget. Have it automatically deducted from your checking account and deposited into your savings account. Amassing enough to cover a few months’ worth of essential expenses in the event of job loss will give you peace of mind. Once you hit that milestone, save for something else that is important to you.
Review your credit card activity daily
According to the credit bureau Experian, the average number of credit cards per person is 3.84 accounts, so you probably have at least one credit card. Rather than waiting until your statement comes in to see what you’ve charged and how much you owe, review the amount you owe every day. That figure will help you decide if you really want to make another charge that will be added to the bill. Most credit cards have rewards programs, too, so track any cash-back, points, or miles you have to spend.
Pay as you charge
Although all credit cards provide interest-free grace periods, pay as you go instead. After each charge, stop and delete that exact amount with your bank’s mobile app. Not only will this routine guarantee a debt-free lifestyle, perfect payment history, and low credit utilization, if your card does offer rewards, you will be sure to profit from the process. More, you will never be faced with a big balance that you can’t pay in full.
Check your credit report quarterly
You will want to ensure that your credit report only lists accurate information, so you can dispute any errors. In general, you can get a free copy of your credit report every 12 months from each credit reporting company. Mark your calendar with a reminder to check one every four months. Because of the COVID-19 pandemic, though, annualcreditreport.com is currently allowing consumers to access their credit reports at no charge every week.
Each of these money and credit habits are positive and feasible, but don’t overwhelm yourself. Focus on the one or two that you can embrace with the least trouble, then add as needed. You’ll be financially fit in no time.