IF YOU’RE making New Year’s resolutions, you’ve probably thought about your finances and habits to adopt or drop this year. The difference between getting ahead or falling behind financially usually comes down to small actions you repeatedly do.
If you want to create more financial success in 2019, try implementing these six daily habits.
Stay vigilant for signs of identity theft. Identity scammers use the power of technology to steal information and money from you. Key data cybercriminals want include your:
- Birthdate
- Social Security number
- Driver’s license number
- Credit card numbers
- Bank account numbers
- Insurance policy numbers
But you can fight back using some basic habits. One is to never share this information with any person or company you don’t trust completely or that doesn’t absolutely need it.
If you write down or store your sensitive data, make sure that it’s digitally secure or kept in a locked filing cabinet. Also, make a habit to shred paper mail before throwing it away so dumpster-diving thieves can’t get your personal information.
Never visit your financial accounts or work with any confidential documents while you’re connected to a public, unsecured Wi-Fi connection, such as in a coffee shop or airport.
Automate your financial goals. It’s easy to fall into bad habits and lose sight of your financial goals. The trick to overcoming self-destructive financial behavior is to put these good habits on autopilot:
- Participate in a workplace retirement plan. Workplace offerings may include a 401(k), 403(b) or 457. These types of accounts work well because contributions are automatically deducted from your paycheck before you’re tempted to spend the money.
- Use direct deposit. Have a portion of your paycheck, benefits or tax refund sent to a savings account. That’s the best place to save for short-term goals, such as an emergency fund, home down payment or vacation.
- Set up recurring transfers. Automate these transfers from your bank account to make contributions to an IRA or to your savings account every month.
The earlier you start saving and investing, the more financial security you and your family will have. You’re never too young to begin planning for your future.
Track your spending carefully. If you’re struggling financially or just want to achieve more challenging financial goals this year, make tracking your income and expenses a habit. You can’t change what you don’t measure.
Most financial programs, such as Mint and Quicken, have easy-to-use budget functions. They automatically aggregate your financial transactions, organize them by category and allow you to create and monitor a budget.
Use hacks to avoid impulse purchases. Overspending is a common barrier to achieving financial goals. The more you give in to unplanned or excessive purchases, the more harmful they can be to your financial life.
Instead of caving in to impulses, use these habits that stand in the way between the compulsion to buy and buying:
- Sleep on it. Try forcing yourself to delay purchases by at least one day so you have more time to consider if you really need them. For instance, you might wait 30 hours before buying anything over $30. Or you might impose a spending threshold, such as $250, over which you must discuss a potential purchase with a spouse, partner or friend.
- Avoid your favorite stores. If there’s an online retailer or a local shopping avenue where you can’t resist buying something, avoid it. Understanding what tempts you the most will help you avoid making purchases you can’t afford.
- Remember your last spending mistake. If you feel compelled to buy something you don’t need or that isn’t in your budget, think about the last bad buying decision you regretted and don’t let yourself give in to the impulse again.
Protect your ability to earn. Your financial well-being depends on your ability to earn an income. While cutting unnecessary expenses is important, there’s a limit to the amount you can reduce. However, the amount you can earn is unlimited. So create a habit of improving your job skills, network and business opportunities. You might get a promotion at your same company, a better-paying job with a different employer or create self-employment income with a side business.
Be grateful for what you already have. Making gratitude a daily habit can help you improve your finances, relationships and reduce stress. If you’re a compulsive shopper or can’t seem to stick to a budget, it’s time to reevaluate what you already have.
Try organizing your belongings in better ways, so it’s easy to see and remember what you own. Sometimes paring down is the key to figuring out what you really use, so you can find more satisfaction in those items instead of accumulating more.
Taking some or all of these small actions every day might not seem significant at the moment, but they will add up to more financial success over time.