Good Money Habits To Learn

Money can be more difficult to manage than some of us like to admit. If you’ve got into difficulties with money over the last year, then 2020 can be the time to change that. Money troubles can come after a job loss, unexpected expenses or from bad money habits. Bad credit can make money struggles even worse, but you can put it right. Here are some of the best money habits to learn. 

jar with coins inside

Image – free for commercial use


If you do have money problems and need money urgently, bad credit can make it hard to get. For emergencies, you could consider short term loans for bad credit. The best way to avoid money problems though is to learn these good money habits. 


Pay your bills on time.

Late bills usually end up costing you more in the long run, as late payments often come with late fees. Payment history can also impact your credit score, so paying on time is a good habit. Keep things organised to make paying on time as easy as possible. Put your bills on autopay or set up direct debits to pay them at the same time every month. Any bills that you can’t do this with should have their due dates marked on their calendars, so you know what is due to be paid one. 


Create a budget.

Budgeting isn’t meant to restrict your life, and is instead a plan for your money.  Work out exactly how much money you have coming in every month, and then calculate how much goes out. Include your bills, and work out an average for costs like grocery shopping or travel. Decide on an amount to put into savings and how much you want to have left over for fun money. Stick to your budget so you won’t overspend. 


Invest regularly.

If you want to build up your savings, investing on a monthly basis is a good way to do this if you’re sensible. An easy way to invest is through a company arranged pension scheme or 401(k). Speak to your HR department about how to enrol and have your contributions automatically taken. If your income goes up, pay more in. The more you can invest into your pension, the more you will have to live on in later life. 


Keep track of your finances.

If you want to get a realistic picture of your financial health, you need to track your finances. Watch how your net worth changes over time, and make sure it is trending upwards. Use a money management site to keep track of how your financial health is looking. 


Make your savings a priority.

Saving regularly gives you a safety net for later. Whether you save to have an emergency fund, to buy a house or to save for anything else in your future, putting money away on a consistent basis is the easiest way to make sure that savings pot continues to grow. Set up a standing order to automatically move some money into your savings account on the same day you get paid. If you never see the money in your current account, you won’t miss it. 


Keep up your habits.

A habit takes a little while to form, and repetition is key to make an action become a habit. If you set a new money habit, stick at it until it becomes second nature. 


Check your credit score.

Your credit score isn’t the only indicator of financial health, but it is an important factor. Your credit score can have an impact on your ability to buy a home, finance a car or get a loan at a fair interest rate. Even starting a business will need you to have a good credit score. Check your credit score regularly so you know what’s going on. A regular check also means you can catch and correct any errors that may be lowering it, and can identify any problem areas that you can work on to make your score stronger. 


Cut back on regular purchases.

A budget is a good way to save, but cutting your expenses is important too. Compare the prices of any regular payments; look into cheaper alternatives for your internet, your mobile phone contract, your utility bills and your car insurance. Could you shop at a cheaper supermarket, or buy own brands instead of branded products? Is there somewhere nearby where you can get cheaper fuel for your car? Do you need several different streaming packages or are you paying for one or two that you don’t really use? 


Spend less than you earn.

It sounds obvious, but overspending is an easy habit to fall into. Living pay cheque to pay cheque and borrowing to get by in between is more common than you might think. By getting into better money habits, you can pull back your expenses and start living within your means. 


Pay down credit card debt.

Not all debt is a bad thing. Some debt allows us to buy a home without having to wait for years to enjoy it. Debt can let us buy a car when we might not otherwise be able to afford one. However, most debt isn’t like this and can cause us real problems. Credit card debt is one of the most common forms of debt,  but it’s usually for something that we could actually live without. Reducing credit card debt can save you a lot of money as you’re not paying interest. By keeping this debt low you can increase your savings and live without credit cards hurting your credit score. 

Not all debt is a bad thing. Some debt allows us to buy a home without having to wait for years to enjoy it. Debt can let us buy a car when we might not otherwise be able to afford one. However, most debt isn’t like this and can cause us real problems. Credit card debt is one of the most common forms of debt,  but it’s usually for something that we could actually live without. Reducing credit card debt can save you a lot of money as you’re not paying interest. By keeping this debt low you can increase your savings and live without credit cards hurting your credit score. 


Track your expenses.

Being honest with yourself about what you’re spending is a good way to track your finances. Each day, write down honestly every single thing that you spent, whether you paid the rent, or bought a cup of coffee on the way to work. Keep your receipts and card statements so you can remember exactly what you spent. Keep this record on your phone, with an app or in a notebook; however you find it easiest to keep track. Keeping a record helps to be aware of where your money goes. Use this record to spot money that you spent when you didn’t need to. Did you buy lunch at work when you had a perfectly good sandwich in your lunch break? Did you spend more than you thought on takeaway coffee? Where could you make improvements and save yourself some money? 


Check your bills.

When the bills come in, most of us just pay them and don’t really pay attention to what we’re paying for. Actually, your internet or your phone bill can sometimes fluctuate a little due to small charges or added fees that get tacked onto your monthly bills. Each month, go over your bills line by line and check for any extra fees that have been snuck on. Could you have any of those taken off, or change some behaviour to stop your bill having extras added next time? Are you paying for a sports channel package on your cable bill during the off season? Is there a charge that you can’t understand that you could dispute with the company?


Negotiate your bills.

If you can, try and negotiate your bills to help you to reduce the amount of money that is going out each month. More companies than you might think are willing to negotiate with you about your bills in order to keep you as a customer. Acquiring new customers is expensive, so they may well be willing to help you cut costs to keep your business. Call each of your accounts and ask for their best deal or a price reduction. You could do some research online first to see if others have had success like this and how they did it. 


Use coupons.

Saving money on everyday things is a great way to improve your finances. Some things you can’t avoid buying, like toilet paper or toothpaste, no matter how spending savvy you’re trying to be. If you can, keep an eye out for coupons that you can use for these everyday purchases to save you some money on the things you have to buy. Coupons can be found on online couponing websites or in your daily newspaper. If you find a good one, save it and put it in your wallet, ready for your next big shop. If you want to get really into couponing, there are lots of websites dedicated to getting the most out of couponing to help you save as much as you can. Get weekend subscriptions to different local papers, as these will often have vouchers to be spent in your local area.

Don’t be tempted to buy things you don’t actually need just because you have a coupon for it. Coupons should only be used on something you were actually going to buy already, or they’re not actually saving you any money. Don’t be picky about the brands you buy so your coupon use isn’t too restricted. Any other good trick is to use cashback websites to get cash back on your regular purchases. As with coupons, don’t be tempted by other purchases, and only use the apps for planned purchases.


Leave a Reply