Establish Good Financial Habits


Establishing good financial habits early can help you build a sound financial foundation and reach your financial goals.

  1. Make sure your financial information and records are organized. Knowing where important financial information is located and having a system for paying your bills each month will save time and aggravation.
  2. Use direct deposit for your paycheck. It will save you time and get your money working for you sooner.
  3. Use automated savings plans to save for short and long term purchases and to reach financial goals. You can have your financial institution or your employer transfer a set amount each month into your savings account. Participating in your employer's 401k retirement plan is also a form of automated savings.
  4. Prepare a household spending worksheet. The process can help you identify potential areas for reducing expenses. Analyzing your spending on a regular basis will help you monitor expenditures and develop effective savings habits.
  5. Prepare a personal balance sheet periodically. Having a current personal balance sheet can be a handy tool when you are applying for a loan. Over time, you will be able to monitor your progress toward your long term financial goals.
  6. Reconcile your checking account monthly. This will help you avoid bouncing checks and incurring fees that may be charged if your balance falls below the minimum.
  7. Review all your bills and statements as soon as you receive them. This way, you can identify and correct any errors immediately.
  8. Make credit card payments promptly and pay more than the minimum. Avoid late payment fees and reduce the amount of interest you owe on unpaid balances by making sure your payments arrive before the due date. Paying only the minimum will cost you more in interest and will increase the amount of time it takes to pay off the balance.
  9. Be aware of fees. Try to only use ATMs that are a part of your financial institution's network. Pay attention t o minimum balances and excess transaction limits on your checking and savings accounts.
  10. Learn more about how to handle your finances. The more you know, the easier managing your finances will seem. Try to read the personal finance columns in newspapers or perhaps even subscribe to a personal finance magazine.