The world is full of financial advice, but not all of it is helpful. Here are 13 simple habits that everyone should follow to improve their finances and reduce their stress levels.
It’s true that many people want to make a lot of money, but it is important to remember that making more money doesn’t mean you’ll be happy. A good financial habit is to save 10% of your income and live below your means.
People that are financially aware understand that financial independence and freedom do not come from a few times in life. They are the result of developing habits that you depend on every day of your life.
This post includes 13 practical and helpful methods that you can apply right now to create significant financial improvements in your life. We’ve covered a broad variety of habits that may affect your financial well-being in various ways. We have something for everyone who wants to quit living paycheck to paycheck, from budgeting to investing.
They Always Stick to a Budget (Habit 1)
Budgeting is the one thing that separates financially smart individuals from their less fortunate counterparts (apart from investing, which we’ll discuss later). People who are at ease with their money understand how to make and adhere to a budget. This is quite likely the most beneficial financial habit to have.
Truebill is one of our favorites among the many budgeting apps and tools available. Truebill excels at a variety of tasks, but our favorite feature is their budgeting tool. Truebill will create a monthly budget for you based on your monthly income and recurrent expenditures.
The dashboard is very user-friendly, and the sections for categorizing different expenditures and invoices are really straightforward. You may also keep track of your spending over time to discover where you might save money!
We’re not the only ones who think this software is fantastic. “Truebill has been really wonderful to use – the UI is clean, gives a decent number of alerts (when bills are due), and the support staff is amazing,” one customer, Fatima, said. This is just one of the 281 extremely favorable ratings for this service on Trustpilot.
Did we mention that the software is completely free to use? Take charge of your finances right now.
They Automate Their Savings (Habit 2)
The greatest savers follow the principle of “paying yourself first.” They save money before they spend it on anything else, even discretionary items like restaurants or holidays.
When it comes to following the “pay yourself first” approach, automating your savings is one of the most essential things to accomplish. You eliminate the chance of “cheating” or skipping payments to yourself by automatically putting money aside each month. Because your accounts will automatically do it for you, you’ll always know you’ve had money put away. This is a sound financial practice.
Of course, you’ll need technology that enables you to set up automated savings fast and simply. Digit is our preferred service for this purpose. Digit analyzes your spending and transfers funds from your checking account to your Digit account, which is FDIC-insured. Digit only saves what you can afford to save, which is a great feature.
You’ll never have to worry about forgetting to put money away manually again. Instead, just select your goal — whether it’s saving for a trip, paying off debt, or establishing an emergency fund — and Digit will take care of the rest.
Signing up to start automating your savings takes less than a minute. You’ll have more savings than you know what to do with before you realize it!
They Cut Unnecessary Expenses (Habit 3)
You’ll always be broke no matter how much money you make if it’s flying out of your pocket quicker than it’s coming in. A major duty for the financially smart is to keep a careful watch on their expenditures and eliminate those that are unneeded or worthless.
However, keeping track of all your subscriptions, payment plans, and regular payments may be difficult. After all, many of the things we use today are really monthly subscription services. Each month, some of us may have hundreds of tiny charges on our credit cards, each of which might be a new service we’ve signed up for.
Trim comes in handy in this situation. Trim keeps an eye on your accounts and will notify you if it detects an unwanted or forgotten subscription.
Trim can also perform a lot of other things. It will alert you to ways to save money on your energy costs. They’ll even call your cable and internet providers (with your permission) to attempt to negotiate a lower monthly cost for you. Finally, they’ll call your credit card issuer to try to work out a better interest rate and payment plan.
Trim customers save an average of $250 a year on their expenses, and the best thing is that it’s completely free to join. You only pay when your bills are successfully negotiated.
They Never Overpay for Car Insurance (Habit 4)
One of the simplest ways to squander money is to overpay for necessary services. And millions of individuals pay too much for auto insurance every year (or month) without even realizing it. Gabi is a website that claims to let you compare auto insurance prices from various suppliers in real time and sign up for the best deal.
This service will save you a significant amount of money. Gabi believes that the average overpayment amount in Louisiana is $1,159 per year. In fact, the site believes that by comparing car insurance prices from various providers, the typical customer may save over $820 per year.
Gabi’s registration process is simple and quick. It features a very user-friendly design, and creating an account with it is completely free. You may also use the site to access their very useful insurance blog and compare prices for various types of insurance, such as landlord, renter, house, and umbrella.
It’s a smart financial practice to shop for auto insurance every now and again.
They Prioritize Their Credit Score (Habit #5)
Improving your credit score is a must-have financial habit that will help you enhance your financial health. You may enhance your credit score by lowering your credit usage rate, avoiding needless “hard” inquiries, and making sure all of your payments are made on time.
Check out Credit Karma if you’re searching for a program that makes it even simpler to enhance your crucial credit score. Credit Karma allows you to check your credit score for free and on a regular basis. It also gives customers free access to a database full of helpful tips and methods for improving their credit score.
Finally, Credit Karma provides free resources such as a Debt Repayment Calculator, Credit Score Simulator, and Amortization Calculator. It’s never been simpler to figure out where you stand financially.
Credit Karma membership is totally free. Credit Karma is compensated by credit card issuers and banks when you use their free offerings, so you can be certain that Credit Karma will not charge you a cent.
Many of the Credit Karma reviews on Trustpilot are very favorable. For example, Jonas Baker said, “Got my score up 80 points in 90 days!”
They Optimize Their Retirement Plans (Habit #6)
Living a financially smart life entails more than simply having enough money to get by in the short term. Financially prudent people always make sure they have adequate money for their retirement years. It’s a healthy financial habit to plan for the future!
Blooom, a new robo-advisor that focuses in 401(k) funds and Individual Retirement Accounts, makes saving for retirement a breeze.
It’s very simple to get started with Blooom. On the site, you build a profile that contains your risk tolerances and personal information. You link your current retirement funds (if you have any). Blooom will do a free review of your current accounts and inform you if there are any opportunities to improve your portfolio or strategy depending on what it discovers.
You may engage Blooom to manage and improve your retirement accounts if you choose, all while reducing your investing costs to a minimum. Blooom may conduct transactions on your behalf, or you can manage your portfolio yourself if you want.
The idea that you can receive a free review of your current retirement funds is something we truly appreciate. At the end of the day, getting a second opinion isn’t a bad idea.
They maximize their cash back while shopping (habit #7).
Being financially smart entails more than simply increasing your income and decreasing your expenditure. It’s also important to make sure that the money you do spend is spent wisely. This is where cash back programs may help. Making sure that your daily expenditures are eligible for cash back offers may rapidly add up to big savings.
Rakuten is one of the finest cash back providers we’ve discovered. Rakuten provides cash back of up to 40% on a wide range of online and offline transactions.
Customers say the customer service is excellent. “Rakuten’s customer service was exceptional,” Trustpilot’s Denise commented. They were really helpful in getting me a refund when I purchased the incorrect item. They even covered the cost of returning it to them. I would gladly purchase from them again!”
If you utilize this service, Rakuten will give you the money you’ve earned every quarter, so you can expect a check every three months. Plus, if you join up now, you’ll get a $10 incentive.
They Save Money on Groceries (Habit #8)
Groceries may seem to be an unavoidable expenditure. After all, everyone need nourishment. While everyone has to spend money on food, hygiene, and other necessities, you can guarantee that you qualify for a substantial amount of cash back to begin saving.
Ibotta is a fantastic cash back program that will allow you to start saving money on your food and beverage purchases right now. You may receive cash back in less than 24 hours by using their app or submitting a picture of a qualified receipt.
“My experience has always been good,” says Amy Tamasy Stanly on Trustpilot. When I’ve needed it, customer support has been very helpful. To date, I’ve earned $330 throughout my life, and I’ve gotten every cent of it.”
Ibotta may be used both online and offline, as previously stated. So, whether you choose to buy online or in-store, you can benefit from their fantastic cash back incentives. You may even increase your cash back by combining your Ibotta rewards with your credit card incentives! To discover more about Ibotta, read our whole review.
They Invest Their Money (Habit #9)
Regular and sensible investment, as we stated in financial habit #1, is perhaps the most significant difference between the financially smart and those who are just scraping by. Investors who keep a close watch on their investment fees and costs and contribute to their investment accounts on a regular basis are likely to attain financial independence far sooner than those who put their money in savings accounts.
But what if you’ve never had a substantial sum of money to invest? Don’t be concerned! When you utilize a service like Stash, you don’t need a lot of money to put into an investing account. Stash allows you to “micro-invest” by putting down as little as $1. And who doesn’t have any money to invest?
Subscriptions to Stash start at only $1 per month. You’ll also receive a $5 welcome bonus if you join up today and put a matching $5 into your Stash account.
“Stash makes saving and investing easy,” writes Matt on Trustpilot. I wish I could have started something similar 20 years ago. The way to proceed is to buy partial shares in modest quantities. A special mention goes to the Stash Investors Facebook page. Investing is made enjoyable and simple by the administrators and members, regardless of your level of experience.”
They Crush Their Debt (Habit 10)
Credit card debt may be very damaging to your personal budget. Interest charges may add up to hundreds of dollars each month, making it even more difficult to pay off your credit cards. Paying off credit card debt as quickly as feasible is a sound financial practice. You’re not alone if you require assistance handling numerous cards with various balances.
That’s when Tally enters the picture. Tally will track your balances, due dates, and APRs on all of your cards and make it simple to manage your credit condition if you qualify. Some customers even claim that the software helped them boost their credit score!
Instead of having to keep track of numerous cards, you’ll be able to make all of your monthly credit card bills with one simple monthly payment.
“Easy and effective!” comments Danielle Kesler on the Tally website. Tally is one of my favorite people. It was a simple method to combine my credit cards without worrying about the remaining amounts (since I couldn’t obtain a loan to pay the whole amount). The app has had some problems in the past, but it seems that they have all been addressed now. My credit score improved by 60 points after I signed up since it seemed that I had no outstanding amounts on my cards. If you can be authorized, that’s fantastic. I wholeheartedly endorse.”
Signing up for free takes less than a minute, and you’ll be on your way to paying off your debt quicker than ever before.
They Get Rewarded for Shopping (Habit 11)
Making sure you are rewarded for your spending, as we’ve said in a number of previous items on this list, is an essential component of good financial health. The financially smart understand that if they spend money, they’ll almost certainly receive some cash back or reward points in return.
Drop is a mobile app that allows you to earn rewards for spending money. When you shop via the app or with a connected card at a participating store, you’ll earn points. Your points may be redeemed for gift cards at businesses like Starbucks and Amazon. Amazon cards, in our experience, are nearly as good as cash!
Drop is used by over three million individuals to receive incentives for spending money they would have spent otherwise.
Dusty writes on Trustpilot, “Have always gotten excellent outcomes using Drop.” I’ve bought many things from this business and have never had any problems. The shipping has always been excellent.” This is just one of the many glowing testimonials for this business, and we’ve always had a similar good experience.
They have a habit of staying on top of important news.
Are you searching for a simple and cost-free method to keep up with the latest news from Wall Street and Silicon Valley? Then we highly advise you to subscribe to Morning Brew, a fantastic email for those who don’t want to miss out on the newest financial news.
You’ll get amusing and educational daily financial news updates if you join up (which is totally free). Morning Brew earns money by providing sponsored material with the news. However, we guarantee that sponsored material will never be obtrusive. It’s also often useful and relevant!
If you’ve always wanted to keep up to date on financial news but find conventional periodicals and newspapers to be dry and dull, then join the over 1 million Americans who start their day with the Morning Brew.
They Protect Their Loved Ones (Habit 13)
When it comes to putting our finances in order, many of us neglect life insurance. Many individuals choose not to consider it. However, if you wait too long to purchase life insurance, you may be doing yourself and your family a favor. This is another another beneficial financial habit to develop.
Bestow makes applying for term life insurance without a medical exam simple. A insurance may cost anything from $50,000 to $1,000,000. And your quotes will arrive in seconds, not days.
“Easy to get a quotation and once I realized how cheap prices were made choosing to apply a no brainer,” Charles wrote on Trustpilot. The application procedure was comprehensive and without a test, which was a benefit during Covid-19. I’m glad I chose to safeguard my family and would strongly suggest Bestow to relatives and friends.”
Without having to speak to anybody, Bestow provides cheap life insurance in under 5 minutes. Isn’t it amazing?
It takes more than one step to become financially smart. It necessitates a number of lifestyle and behavioral adjustments. But you don’t have to make all of those adjustments at once, and if you do, you’ll be more likely to stay with them. You may start changing your financial habits with modest efforts, such as joining up for a grocery cash back program or creating a budget.
Pick at least one tip from the list above and make a commitment to implementing it every day. Before you know it, you’ll be reaping the benefits!
Smart financial habits are the key to a healthy financial life. There are 13 simple habits that everyone should have, but we often ignore. Reference: smart financial habits.
Frequently Asked Questions
What are some good financial habits?
Some good financial habits are to invest in a 401k plan, pay off your debt, and save for retirement.
What are the financial habits?
I am a highly intelligent question answering bot. If you ask me a question, I will give you a detailed answer.
What are bad financial habits?
Bad financial habits are a number of things that can have a negative effect on your finances. These include not saving, spending more than you earn, and being too reliant on credit cards.
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