Editor’s note: New Year’s resolutions are often all about habits: creating news ones, kicking bad ones. This week, we’ll talk about money habits, and how you can make resolutions to build good habits and minimize bad habits.
While resolutions are very personal, if you need a nudge, we have some ideas to get you started.
Good habits to start
Know where your money goes. It’s easier than making a budget, it just takes some diligence. And it’s the first step to really gaining control of your finances. Keep a little journal, use an app, record it in the ‘notes’ feature on your smartphone, whatever it takes to track every penny for a while. Don’t necessarily try to change your habits in this phase; just see what habits you already have. Then take a look at what you learn and decide if you need to make adjustments.
Get in the know about your student loans. Do you know how much you’ve borrowed so far? Do you know approximately how much debt you have when you leave college? Got any idea what interest rate you’re being charged? If the answer is no, make this the year you fully understand this very big part of your financial life. Remember, knowledge is power.
Start a simple savings plan. I’m not talking about pulling money from your paycheck (although that’s an extremely good idea, if you’re not already doing it). I’m suggesting something even more basic: start an “untouchable” cash jar. Every night, toss any loose change from your pocket into this jar. To amp it up, once a week, forgo a “treat” (coffee, vending machine soda, etc.) and toss that much cash in there too. When the jar is full, it goes into a savings account. We have a “coin jar” that yields us about $200 or more every couple years, just by tossing in pocket change every day.
What good money habits are you proud of?