Building good exercise habits leads to a better physique. The same is true for financial health and well-being.
It doesn’t matter if you’re a millionaire or a broke college student; the better your financial habits are, the more financially secure you’ll be, and the more freedom you’ll have in how you use your money. I’m going to provide my top ten tips and habits that will help you maintain good financial well-being in your lifetime.
10 Healthy Financial Habits
- Start saving with an emergency fund. A well-established emergency fund is an account that provides immediate cash, particularly in an emergency like repairing a broken laptop or replacing an overused backpack.
- Write an income and expense statement. Do you know where you are financially? It’s important to create your financial goals realistically. An income and expense statement explains how much money you have leftover after taking into account your salary and living expenses.
- Plan ahead for vacations or fun events. Everyone likes to have fun and spend money on themselves and it doesn’t have to be costly. The earlier you plan ahead, the more you’ll save and sometimes you’ll even get an extra incentive like free lunch.
- Pay off credit cards in full. You’ll want to pay off your payments on time because all your late and on-time payments are on your credit report for seven years where lenders and employers can see them.
- Open a checking account. A bank account with a nearby branch and ATMs puts you in control of your money when you need it.
- Start saving as little or as large as your income allows. Building a habit to save money will cultivate long-term financial growth and increase your savings as you get older.
- Compare textbook costs online. Purchasing textbooks at a discount or even purchasing books from graduated alumni will save you money. Textbooks you get at a discount are just as useful as full-price textbooks.
- Stay away from subscriptions you know you won’t use. Although the monthly subscription may seem like nothing, the annual savings could be used towards your financial goals. Stay committed to only a few subscriptions so that you don’t lose track of the number of monthly subscriptions you are paying for.
- Strive to get higher education. An income determines your standard of living and the more you work towards an education, the more likely you’ll be in a higher pay grade.
- Start grocery shopping by making a list before you go into the store. Making a list helps you stay on track so you know what you’re buying and how much you’re spending. It’s simple and only takes a few minutes.
These tips are collected from what I’ve learned in class, peers, and interning at the Financial Wellness for College Students program with University of Illinois Extension. I hope you use what I collected and you are able to build a better lifestyle because of better spending habits. It takes discipline sometimes, but the rewards and benefits will pay off.
Written by Manish Kumar Raheja, Financial Wellness for College Students Peer Educator, University of Illinois Extension, Spring 2020. Reviewed by Kathy Sweedler, University of Illinois Extension.