March is credit education month! Take this month to set some financial goals, and know what it takes to achieve them. Not sure where to start? We have outlined some good money management habits and goals to start working on this year.
- Set a budget – This one seems like the most obvious, but it is a simple way to get started and to keep your finances on track. Create a simple budget divided into spending categories and set the budget for each category by evaluating your current spending and accounting for your long term financial goals. Then, track your spending to make sure you are staying on budget. There are online budgeting tools, like Mint or You Need a Budget to help you along the way, but there isn’t anything wrong with tracking in an excel file.
- Stop your bad habits – Well, at least your bad spending habits. Try substituting a good money practice for a bad one. For example, if you use a credit card as a primary form of payment without keeping up with the payment, try carrying cash instead. Using cash instead of a card tends to help with visualizing spending with having a concrete limit (when you run out of cash), while credit card spending can be viewed as limitless. If you don’t want to keep up with cash, try using a debit card.
- Become debt-free! – If you have credit card debt, then mostly likely you are paying minimum payments towards your balance every month. However, if you are striving to be debt-free this year, you may want evaluate how you can cut back your expenses to free up the funds to make the largest payments possible. Making larger payments towards your balance will help you get debt-free faster, while reducing the money you’re spending on interest. Once your debt is paid off, try to stay debt-free. It’s better to save up money to pay for your purchases in cash. You may have to be more patient, but it will save you money in the long run by avoiding unnecessary interest payments.