Building good financial habits may increase the amount in your bank account and also set you up for financial success. If one of your New Year’s resolutions is to get your finances in check, now is the time. Even if it wasn’t part of your New Year’s resolutions, there’s never a bad time to start working toward good money habits. MaxLend, a reputable lender that offers short-term installment loans, shares seven good financial habits that can turn your life around for the better.
Budgeting
Regardless of income, budgets can save lives. Create a budget by making a list of all your essential expenses such as your rent, utility bills, phone bill, gas, groceries, etc. Then add in everything else, like lunches at work, monthly subscriptions, coffee runs, etc. Once you have your entire list sorted out, it’s time to kick the non-essentials, a.k.a. the things you can live without. All that extra money can go toward your future or into an emergency fund.
Building an Emergency Fund
Once you begin budgeting, a chunk of the extra cash can go straight toward an emergency fund. To create a decent emergency fund, consider setting a goal of 3-6 months’ worth of savings. Emergency funding can be the cushion you need in the event of a financial emergency. One of the best money habits to have is saving money toward this emergency fund.
Paying Off Debt Accordingly
Get out of debt after college and stay out of debt. Of course, it’s easier said than done. With good financial habits, you may be able to pay off debt sooner than you think. The sooner you pay off your debts, the more money you can put toward your future. Any extra cash in your budget that you’re saving that doesn’t go toward your emergency fund can go straight toward your debts.
Setting Goals and a Financial Plan
Good financial habits don’t just happen overnight – you have to have a plan. Setting realistic financial goals for yourself can take you far. Include short-term and long-term financial goals to keep you on track. For example, a short-term goal would be to save money for a new pair of snowshoes you need for a trip to Colorado. A long-term goal would be completely paying off your college debt or having the money to buy a house instead of renting in a couple of years.
Live Within Your Means
When we say live within your means, we mean that you should live on less than you make. We jokingly – but not jokingly – mean to live like a college student for as long as necessary. If you can, live with a roommate to save a few hundred bucks a month. Keep wearing the same old clothes you’ve been wearing the last few years (does anyone even really notice?). Cook food at home to avoid eating out at restaurants.
Track Your Spending
How much money are you spending on the weekend? How much money are you spending on food every week? How much money are you making on a monthly basis? How much of your income are you saving? You need to know how much money you’re working with in order to begin forming good financial habits. It’s important to realize that if you’re making $5,000 a month but you’re spending $4,500 on gas, food, groceries, and other items, you’re only saving $500 a month. At this rate, it can take what seems like forever to pay off a debt that’s only $3,000. Be mindful of your spending.
Work Towards Improving Your Credit Score
Keep your credit score in mind when spending money. If you want to become financially stable and continue working toward good money habits, you can start by paying off the balance on your credit cards. The lower your credit card usage, the more you’re working toward improving your credit score. Aim to keep your credit card usage under 30%.
When you need emergency funds, MaxLend offers an alternative solution to payday loans. You can apply for cash online with no obligation to find out if you’re approved for an installment loan of up to $3,750 with MaxLend. Compared to the eligibility criteria for most banks and other traditional lenders, MaxLend’s loan requirements are minimal. For more information about obtaining cash loans online or the MaxLend loan loyalty rewards program, contact us by calling 877-936-4336. We’re available 24/7.