Good Habits: Money Matters Make a Difference

Is your inbox or mailbox flooded with incoming bills and payment reminders, proposals for monthly payment plans, and invitations to consolidate your credit card debt?

While December comes adorned in holiday cheer and good will (that encourages us to be generous and spend), January can be a long month with time for reflection – especially as those credit card bills roll in and the after-effects of holiday spending (and overspending) are most acutely felt.

Getting carried away with the excitement of buying things in the holiday season – and then growing your expenses in January with all the post-holiday sales – is as easy as one or two taps on your phone, over and over again. The allure of online shopping is as provocative as ever with algorithms to match your tastes on items that just happen to be marked down. Or discounted. Or under a virtual final clearance tent.

Now is the time to start good money habits

Setting good money habits will make a world of difference—today, tomorrow and through your life. Here are a few simple steps you can take right now:

• Know what you owe. Keep track of your expenses. From the large ticket items to the monthly utilities and predictable expenses, there’s no better time than now (other than last year, or the year prior to that one) to keep a log of what you’re spending. You can rely on your bank statement, but you can also establish your own inventory of your expenses.
• Set up bill reminders. You can establish more control over your finances if you remind yourself what you need to pay each month. It’s particularly helpful to do at the start of the new year, and for those items you need to pay down more quickly. Use a not-so-subtle approach that keeps money management at the forefront of your mind. You can set up alarms on your phone, or even schedule bills through your bank’s online banking or using a mobile banking app. A corollary to this basic approach is to write bill reminders on your physical calendar or date book. Whatever works for you can make a real difference.
• Reduce your number of credit cards. It may sound obvious, but this will work wonders to help you reduce your credit card spending. Consolidating your credit use with a single card that provides ancillary benefits (cash back, travel bonuses, and most importantly, a competitively low interest rate!) can bring control to your financial life.
• Put cash in the envelope. Some people – young and old – like to use cash for specific and regularly purchased items such as groceries. If that works for you, it’s a surefire way to help control spending. Each month set aside your budgeted expenses in an envelope. And manage to that finite amount!

The start of the new year is a great time to try new and different ways to get control of the after-effects from holiday spending. So go ahead and set some alerts and reminders about upcoming bill payments and focus on budgeting what you have – not what you don’t.