It’s time to shake off old habits and embrace better financial choices as the new year begins. Starting fresh has a unique energy, whether it’s the empty calendar or a new planner filled with possibilities. This year, let's break free from the poor spending habits that have held us back. If last year was a bad relationship, it’s time to delete those memories and focus on creating a brighter future.
Sure, you can commit to change any day, but why not harness the motivation of the New Year to make impactful adjustments now? Let’s identify three spending habits that need to go.
Limit Your Online Shopping
With the holiday season behind us, there’s no reason to keep hunting for online bargains. Digital shopping has become incredibly convenient, especially during the pandemic, but it’s also led to more aggressive marketing from brands. They’re aware of our endless scrolling, making it easier to make impulsive purchases.
A friend of mine often implements a no-buy month to curb her spending. This year was no different; she refrained from dining out, buying clothes, or entertainment. Instead, she focused on using her pantry and only bought perishables as needed. It’s a simple reset. Choose a month to try it for yourself! If you track your expenses, the savings will surprise you.
Prioritize Your Savings
If you haven’t set up an automatic savings plan, now’s the time. “Start with just $20 a month,” suggests an expert. “Set up automatic transfers right after payday.” If you can save more, go for it! But if it feels overwhelming, start small.
However, saving is just part of the equation. Assess your expenses and consider cutting back on unnecessary subscriptions or takeout meals.
Always Pay Your Credit Card Balance
You’ve likely heard countless times about the dangers of carrying a credit card balance. When you do, you’re giving away money each month, which can be incredibly frustrating. “If your APR is 23%,” explains a finance expert, “you're essentially handing extra cash to the credit card company every time you use that card.”
If you find yourself in credit card debt, stop using your card immediately. If you have multiple cards, create a spreadsheet detailing balances and interest rates. “Focus on paying off the card with the highest interest first,” the expert advises. “Make the minimum payments on others.”
It’s also wise to sign up for alerts from your credit card company to avoid missing payments, which can lead to late fees and higher interest rates. And remember, you can make multiple payments throughout the month to chip away at your balance faster.
