Are you making a financial New Year’s resolution this year? In a survey by Loyalty Investments, polls found that 43% of Americans who find a financial solution want to save more, 41% want to pay off their debts, and 31% want to spend 31% less. If you want to do better financially in any of these areas or any other this year, there is just one habit you should change! These can be impulse purchases, just one source of income, using credit cards only for the points, spending for convenience, or not sticking to a budget. Much of financial health depends on our habits, so one small adjustment every day can make a big difference.
Make impulse purchases
An impulse buy is any purchase that is not planned. Impulse buying is usually tied to your emotions, such as fear of missing out, urgency, boredom, or even fatigue. This is what marketers take advantage of, which is why you can see chocolate bars in the checkout aisle, for example. A buyer will feel the emotions, see the opportunity, and buy the product or service whether they need it or can afford it.
“To curb impulse spending, first know when you are taking action,” said Paula Pant, budgeting expert at http://thebalance.com. “When you reach for that magazine or candy at the checkout or sale item, force yourself to wait. Before you pull the trigger on a purchase, consider whether you have the extra money to spend on this item and whether you need the product. It gives you time to think about your decision and you will likely find that you don’t need it after all. “
Add a category specifically for impulse buying to your budget. That way, when you see something you want and it falls within the budget, you can buy it! Just make sure not to exceed the specified amount.
Have only one source of income
It is important to develop a steady stream of income. So do your best at your job or work hard on your startup – but don’t leave it at that.
“You never want to be dependent on a single stream of income, your full-time employer, or even a single market because the only constant in life is change and things change so quickly,” said Grant Sabatier, Self-made millionaire and author of “Financial freedom. “” The best way to isolate yourself from this change is to have multiple streams of income. “
To diversify your income, you can start a part-time job, invest in real estate or stocks, or even start a web-based business doing online advertising. But be careful.
“A question we should ask ourselves before investing in anything is, what is the main reason I’m investing here?” Said Roger Merrill, Managing Director of Merrill Financial Associates Investment Strategies, a Provo-based financial advisory firm. “Our investment decisions shouldn’t be based on FOMO or seek to get rich quick. Principle investing can lead to success; However, building wealth requires time, discipline and patience. “
Use credit cards for the points
Using your credit card for certain purchases seems like a breeze. Cashback and rewards are a great incentive to whip out that little card! However, be careful whether you are using your credit card to pay your mortgage or just a pair of shoes.
“Before paying a bill – be it your utility, rental, mortgage, or medical bills – always make sure there are no charges for using a credit card,” said Megan DeMatteo, a money writer and editor at CNBC selection. “In most cases, there will be a 2-3% processing fee that will nullify any rewards you might deserve. In this case, it is best to use an alternative payment method such as a check or a debit card. “
Spending on convenience
Sometimes on a stressful day, an unplanned dinner stop is just the thing. This is an example of a convenience purchase, but those expenses can really add up if you rely on them too much.
Plan ahead to avoid convenience purchases. Instead of ordering delivery on an unexpectedly busy day, take a weekend to prepare several frozen meals to put in the oven for dinner. Instead of having an expensive latte on the way to work, make yourself a nice mug at home. Planning ahead can take more time and money in advance, but what you save in the long run will be worth it.
Not following a budget
If you’re not budgeting, now is the time to start! There are many different Budgeting methods They can follow, including incremental, activity-based, value proposition, and zero-based. Whichever method you choose, there are several benefits to staying on a budget:
- This will keep you focused on your long-term financial goals.
- It will help you avoid unnecessary debt.
- It enables you to save for retirement.
- It prepares you for emergencies.
- It helps you spot bad financial habits.
- It gives you peace of mind.
If you want to do better financially this year, change a habit first! Shop consciously, add a source of income, use credit cards wisely, plan ahead, and stick to a budget. Start now to make 2022 a fiscal year to be proud of!