Good Money Habits
Good Money Habits With Amida This New Year 2023
Just like with your physical health, your financial health depends on the daily decisions you make every day. While healthy habits such as eating better and exercising keep you fit, certain money habits can keep you financially comfortable and help you establish wealth. This is especially true for the lifestyle choices you choose for yourself into the New Year. Right now, is perhaps the perfect opportunity to establish new money habits in your wealth journey! Give these five money habits a try:
#1. Set S.M.A.R.T. Financial Goals & Habits
The benefits of setting goals include greater direction, greater focus, increased productivity, and higher levels of motivation. Setting goals that are specific and measurable can transform your habits, your mindset, your confidence, and your daily actions! This is especially true for your 2023 financial goals.
SMART is an acronym that stands for Specific, Measurable, Attainable, Realistic, and Timely. For example, say one of your big goals is paying off your student loans. To make your goal S.M.A.R.T., it needs to be:
- Specific. Calculate exactly how much student loan debt you have to pay off and what strategies you’ll use to do it. For example, you might be interested in refinancing your loans to get a better interest rate and lower your payments.
- Measurable. Decide how you’ll measure and track your progress. For instance, you might set a secondary goal of paying down a certain amount of your loan principal each month
- Actionable. Identify the action steps you need to take to reach your goal. That might mean rounding up your student loan statements, applying for refinancing, or setting up auto-payments if you haven’t done that yet.
- Realistic. Evaluate your budget to make sure that you can pay off your student loans at the pace you’re aiming for.
- Time-bound. Set a time frame for reaching your goal, such as paying off $15,000 by the end of the year. Use that time frame as a guideline for deciding how much to pay toward your loans monthly.
What are you financial goals heading into 2023? Use the SMART framework to establish a more concrete plan of action. Additionally, be sure to follow up with a financial advisor for more support. There are individuals who are trained in this subject and are there to support you every step of the way.
#2. Track Progress Towards Goals
Goals are best achieved when they are tracked. The more often that you monitor your progress, the greater the likelihood that you will succeed, according to research published by the American Psychological Association. Your chances of success are even more likely if you report your progress publicly or physically record it. Lead author, Benjamin Harkin, PhD, of the University of Sheffield, writes that “Monitoring goal progress is a crucial process that comes into play between setting and attaining a goal, ensuring that the goals are translated into action.”
Set smart financial goals for yourself and track your progress! This could mean setting reminders in your phone to review your progress or setting up monthly meetings with yourself or your partner to review how things are going. Head into the new year with a new strategy.
#3. Pay Off Debt Quickly
There are three common debt repayment strategies that can help people pay down or pay off debt more efficiently. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. Paying off debt as quickly as possible will save you money in interest and help keep your credit in good shape. The goal is a debt-free lifestyle. In other words, an enhanced quality of life.
All personal debt (not corporate or government debt) can be categorized within a few main types, including secured debt, unsecured debt, revolving debt, and mortgages. If the debt process seems overwhelming to you, know that you are not alone! Financial advisors are here to support you, and help set strategies in place so that you can become debt free as soon as possible.
#4. Reduce Spending Habits
Are there any places in your life where spending money has become a habit? Use these 3 simple steps to reduce your spending into the New Year!
Brew your own coffee – If you’re spending around $4 a day at your fave coffee shop, that adds up to $28 a week and around $120 a month. Instead, you could cut that expense down to around $20 a month by brewing your own coffee. Then put that $100 to work other places in your budget!
Pause or cut subscriptions and memberships – Most people have monthly subscriptions for cable TV or streaming services, etc. Once you set one up, you likely don’t think about it much, yet the money comes out of your account every month. This New Year, reevaluate all of your online subscriptions, memberships, and app purchases. Take some time to think about the stuff you don’t really even use, watch or read. How to check iPhone subscriptions: Go to phone Settings > Click iTunes & App Store > Click Apple ID at top of screen > Click View Apple ID > Click Subscriptions > Click desired app > View subscription status.
Enjoy the great outdoors.– There’s a whole world out there, and it’s just waiting to be explored on the cheap. Hiking. Biking. Running. Stargazing. Getting outside for fun is an easy way to save money in your entertainment budget line. Because budget-friendly fun is a thing. An awesome thing!
#5. Take Advantage Of CC Benefits
Credit card rewards programs offer cash back on purchases, tangible services like airline miles, no interest as an introductory period or low interest, or discounts and special rates on travel and travel amenities, and more. Call your credit card company and be sure you are up to date of all of the benefits. Additionally, if you are in the process of opening a new credit card, consider your own purchasing habits when shopping for reward programs. For example: if you don’t travel much, a reward program that offers airline miles probably won’t be too useful. If you do a lot of online shopping, a card that offers deep retail discounts may be more useful than one that offers discounted gasoline. Check out this article from Investopedia with further details about different credit card programs available.
Amida Wealth Family Conversations
Talking about money and modeling good money management sets the future generation up for financial success. If this is a topic not often discussed at your dinner table – perhaps, you become the change you wish to see. Good money habits start with discussion and awareness. What actions do your friends and family take, in-order to develop a more confident relationship with their finances? Share this blog, and let us know how it goes! Amida advisors are always one phone call and email away.
Remember to be patient when creating new money habits for yourself. It can take a few weeks or sometimes even a few months for your new money habits to feel like a routine. If you can stick with them, the end result can be a healthier financial situation by year’s end, and gratitude (towards yourself) for starting today. Choose wealth!