5 Healthy Financial Habits For the Year Ahead
THE NEW YEAR OFFERS AN OPPORTUNITY FOR FINANCIAL GOAL SETTING for many people. Consumers can lay the groundwork now for a brighter financial future.
As many people begin to make their resolutions, their personal finances, and specifically targeting debt, will be a top priority for 2024.
As of October 2023, total U.S. consumer debt was $17.13 trillion, up 3.5% from October 2022. This figure encompasses credit cards, auto loans, mortgages, and other borrowing methods that consumers utilize. Additionally, the federal student loan payment pause has ended after several years, so millions of borrowers will need to factor loan repayments back into their monthly budgets. On average, that could translate into an extra $244 that borrowers owe each month.
These five healthy financial habits can help set you up for success in the year ahead.
Review or start your budget. To stay on track with your financial goals, start by reviewing your spending habits. If you are saving more than expected, consider using the extra funds to pay off debt or invest. If you are spending more than planned, brainstorm ways to cut back. Make sure your budget is realistic and flexible to accommodate unexpected expenses.
Review or start your emergency fund. When it comes to savings, every little bit helps. You’ll hear a lot of experts recommend that you have enough cash set aside to cover your family’s expenses for 3-6 months, or to contribute 10% of your pay into savings. If this feels out of reach, remember that everyone has to start somewhere. If you’re not able to contribute 10% of your pay into savings, try starting with 5%, or even 2% to get started.
Review your retirement savings. If you have room to spare in your budget, consider increasing the amount dedicated to a retirement savings plan. By doing this, you'll help set yourself up for a more financially secure future.
Manage subscriptions. Every little bit helps! Check your credit card and bank statements to see what monthly subscriptions you're currently paying for. If you're paying for a service or subscription that you rarely use (or forgot you even had), it may be time to cancel one or more of them.
Change your passwords. Changing your passwords isn’t just a good security practice, it's an important step toward better protecting yourself against financial fraud and identity theft. It’s recommended to change your passwords every three months. And make sure to create strong, unique passwords that have both uppercase and lowercase letters, as well as numbers and symbols.
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