We would all like to think of ourselves as people with good financial habits, but the unfortunate truth is, it’s quite common to have bad financial habits that stop us from achieving our goals. But it doesn’t have to be that way! There’s never a bad time to look at your financial behavior and improve your ways. This is true now more than ever. As many of us are reconsidering our spending and financial stability in the midst of the coronavirus outbreak, there’s never been a better time to take stock of our financial habits and start working towards better practices.
Setting goals and working towards them
Everyone knows it’s helpful to have money saved for a rainy day, but a rainy day unfortunately isn’t the most exciting thing to save for. A good place to start is to sit down and write out your financial plans for the next few years. Or, if that seems too daunting, why not try to write our your plans for the next couple of months? This exercise will help you to figure out your priorities and make more informed choices. Whether your long-term goals include a dream holiday, furthering your education or becoming a home owner, it’s much easier to save when you have a clear idea of what you’re working towards. Knowing your intentions clearly will help you work out a manageable plan to save money, and turn intention into reality.
The process of goal-setting is especially important because many people underestimate how long it will take to achieve a financial benchmark and the resources they will need. Big commitments can feel scary, so a good way to get started is by making a pre-commitment. This is a decision or set of decisions made in the present, in order to limit your options in the future. This means that instead of having 10 possible options, you can start taking steps that will reduce those down to two or three choices. Limiting your options in this way can help to make goal-setting and saving feel less intimidating, and allow you to ease into a financial plan that suits you.
Tips and tricks
After you’ve made a list of your goals, one great way to help you build up your savings account is to set up an automated transfer from your checking account. It’s important to be realistic, so make sure you don’t overstretch yourself by attempting to put a higher amount into your savings account each month than is feasible. By setting up an automated transfer, you’ll see your savings increase and you won’t even have to think about it. And while you’re automating your payments, why not name different accounts? If you can set different account names to correspond with your goals, it’ll make it even easier to see the progress you’re making and stay motivated. You can rename your HUECU accounts, via online banking.
Another way to keep on top of your expenses is to withdraw a set amount of spending money each week or month. That way you can be more in control of how much money you’re using on day-to-day expenses, and reduce the desire to spend on tiny purchases here or there which can really add up. Alternatively, setting up balance and spending alerts with your account can also be a helpful idea to keep track of your outgoing funds.
What is your money personality?
Curious as to how your financial and spending habits stack up? Take a money personality quiz! A quiz can give you more insight into the good financial behavior you should keep up, and the bad habits to look out for. For example, people who are money-avoidant tend to ignore how much they’re spending and might make purchases that they ultimately can’t afford. Getting to grips with your money personality earlier can set you up for better saving habits in the future and make it easier to achieve your goals. Whatever your money personality, it’s never too late to change your financial behaviors. Taking stock of how you interact with money is a great starting point that can give you an insight into your financial ways and help you improve your saving skills.
Not sure about what path to choose?
For many people, choosing how to allocate a paycheck can be a difficult and even quite stressful situation. This might even turn into decision paralysis, which means becoming so overwhelmed with all the options available that you find it impossible to choose, and so make no decision at all. A lot of people put off making big financial decisions, which will only harm your life and finances in the long run. It can be overwhelming to think about how to manage your money, but this is one of the many things Greenpath can help you with. GreenPath counselors can talk you through your options and help you to make the right decision for you, without the stress.
As an HUECU member, you have access to GreenPath to help you consider your financial choices, work towards your goals, and improve your financial behaviors. You can even take a Redesign Your Financial Habits course to learn more about your financial behaviors.