What do you every single day as it pertains to managing your money?
Take some time to think about that question, answer it in your head, and then label that habit as “good” or “bad.”
For example, if you check your bank statements at the end of each day to track your spending activity, let’s call that good habit.
Like any habit, you must practice good financial habits day in and day out until they become a way of life.
If you’re looking to improve in this area, the following five money habits can help you control your personal finances and secure your future.
1. Track Your Spending
Tracking your spending on a regular basis will give you an accurate picture of where exactly your money is going. Which, in turn, will help you determine where you want your money to go instead (such as to a retirement account, a savings account, or toward debt). Knowing exactly where your money is going is the best way to stay on top of your financial life.
2. Stick to a Budget
Setting a budget and staying within it will help you keep your spending in check and ensure that you’re living within your means.
When setting a budget, make sure that you’re being realistic, covering all the necessary expenses and savings before allotting money for discretionary expenses.
Related: How to Create a Monthly Budget
3. Automate Your Savings
Setting up automatic transfers is a money habit hack, because it is only a one-time activity, but the benefits are endless.
To get going, all you have to do is sign up for an automatic transfer of money from your checking to your savings account. This helps you put aside money effortlessly, without thinking about it.
4. Invest
Allocating money to your savings is great, but the interest you earn on your savings account is probably not enough to help you meet your long-term financial goals.
Consider putting your money to work by investing — the earlier you start, the more your money will grow through compound interest.
5. Stay Informed
Keeping up-to-date on financial news and trends will help you make better decisions with your money.
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Financial Illiteracy is a Growing Problem for Adults in the U.S.
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