No one is born with excellent money management skills, but the skills can be learned and only require simple changes to your daily life. It’s never too early to implement a few habits that can help you achieve a robust savings account.
Here are five tips to establish healthy money habits:
- Financial education
It’s far easier to destroy your credit than it is to repair it. Make sure you understand how credit information is collected and how your score is determined before you apply for credit.
- Credit Monitoring
Make sure to keep an eye on your credit report. Check it one or two per year for errors or suspicious activity.
- Rainy Day Fund
The number one reason for credit card debt is the lack of an emergency fund. Because accidents and unforeseen cost arise, it’s important to have a savings account with funds earmarked for these types of events.
- Timely Bill Payment
Late payments are a leading cause of poor credit scores. Payment history is a heavily weighted portion of credit score calculation.
- Set a Budget
Out of control spending is my far the worst habit that you can develop as a saver or financially healthy person. Resisting impulse purchases and setting a budget is a good start to developing a spending plan and sticking to it.