Your financial health is just as important as your physical health. That’s why it is important to start practicing healthy financial habits now. Remember, it’s never too early or too late to start a good thing.

Consider adopting these three simple financial habits today for a brighter financial future tomorrow.

Evaluate Your Expenses

Budgeting is a key cornerstone to mastering your finances, but it can seem intimidating and time-consuming if you’ve never done it before.

To get started with a basic budget, you should list your monthly income. Then you’ll want to write all of your one-off and recurring monthly expenses. Lastly, you will compare the difference between your “bringing home” and what you’re spending. This part can be a huge eye-opener to people because it will show your estimated monthly savings or if you have overextended your means.

Like most things in our world, technology has also streamlined the budgeting process. There are a plethora of free budgeting apps and tools available on your favorite mobile device that can track and organize your spending habits, so all you have to do is review it and update your spending habits accordingly. Your financial institution may even have a budgeting tool within their digital banking platform.

Something that most people don’t realize is that a budget isn’t meant to limit your money and dampen your fun. Your budget is there to help you find more efficient ways to maximize the money you work hard for.

Set Up Financial Boundaries

Spending beyond your budget can put you in a bad spot financially. Some ways to curb overspending is to ask yourself “Do I need this? Can I do without this?” to see if these purchases are justifiable for your particular situation.Many financial experts also suggest following the “50-20-30 rule” as a guide on how you should use your monthly income.

  • 50% of your monthly income should go towards necessities, including utilities, food, and rent or mortgage.
  • 20% should be put to your savings and paying your debt, such as paying off loans or student debt.
  • 30% of your money goes to personal purchases, such as your phone plan, internet/cable/streaming services, clothing, and personal care.

This financial recommendation provides you with a clear guide on how your income should be divided up to help make it easier to stick to this practice. 

Make yourself a priority

Paying yourself first by saving or setting money aside. This small action can help you be financially prepared for anything, good or bad, that comes your way. Some of the most common areas people save for are; retirement, emergencies, major life changes, and big purchases.

There are options available to you that can simplify and speed up this process. This way you won’t even see the money, so it keeps you from spending it and moves you closer to your savings goal faster.

Your employer may even offer direct deposit options that allow you to divide up portions of your paycheck that will get automatically put into different types of accounts each pay period. You can also schedule automatic transfers from your financial institution’s digital banking to a secondary savings account or even have your expenses rounded up to have the extra change put into another savings account.

Remember to regularly check-in and adjust your budget and savings goals to make sure these items fit your financial situation at that time in your life.

We know practicing healthy financial habits is easier said than done, but with a bit of time and self-discipline, it will become second nature to you. AFFCU offers Savings Accounts and Certificate Accounts to help keep you on your path to financial success. 

Need some more help getting started with budgeting and getting control of your finances? AFFCU has partnered with industry-leading BALANCE to provide you with free access to expertly-crafted financial education and resources to help with your fiscal matters. Learn more about BALANCE.