Habit Stacking Your Personal Finances

13 Small Changes to Improve Your Finances

Improving your financial situation requires discipline and deliberate action. Really, when you think about it, the money you keep largely depends on the choices you make on a daily basis. Fortunately, making smart financial choices doesn’t always require that much of your free time. In fact, there are a number of small actions you can take every day to make improvements to your current situation.

1. Transfer Funds

It’s important to always know how much money you have and where it is. If you know how much money you have, you can better decide how it needs to be saved or spent. Also, over-drafting and bouncing checks are expensive habits you can easily avoid.

Action:

Take a look at each bank or credit union account you have. Write down how much money you have in each account. Decide whether or not you need to transfer funds from one account to another to spend or pay bills.

Time required:

Five minutes.

2. Read a Personal Finance Article

You can never be over-educated, especially about finance. It’s important to know about the economy and personal finance in order to make the best financial decisions. Learning from others is a great way to save more money and avoid costly mistakes.

Action: Use Google, Yahoo! or Bing to find an article about personal finance. Whether it is an advice column or a daily piece written by an expert, it is sure to provide you with insight into personal finance as well as inspire you to make changes to your personal financial situation.

Time required:

Five minutes.

3. Put Loose Change in a Jar

A quarter here and a nickel there doesn’t seem like anything substantial, but when you collect all your change and keep it in one place, you’ll see how quickly it adds up! Every time you add more change to your change jar, you are essentially adding to a savings account that is growing over time.

Action:

Check your pockets, purse, kitchen table or any other place you might leave your spare change. Collect it and put it all in a jar. Avoid the impulse to take change out of this jar by keeping a lid on it and storing it inside a cabinet or drawer.

Time required:

Two minutes.

4. Write Down Yesterday’s Expenses

Tracking your expenses is the smartest way to manage your personal finances. Writing down everything you buy as well as how much it costs will give you great insight into your spending habits. Over time, you will notice trends in your spending and be able to easily decide where cuts can be made to save money.

Action:

Use a checkbook or notebook to write down each expense from yesterday. Keeping your receipts makes this way easier than trying to write them all down by memory. By day, write down each item and cost, tax included. You can also write down whether you paid cash or with a check or credit card.

Time required:

Three minutes.

5. Count Your Cash

When you know how much cash you have, you can make better decisions when spending it. It’s important to know how much cash you have in case you have a bill that needs to be paid. You will also need to know how much cash you have if you shop at a store that does not accept credit or debit cards.

Not having enough cash for a purchase can cause you to use your credit card, which often results in making a larger purchase than intended. You’ll also have to pay interest on your purchase unless you pay it off immediately.

Action:

Collect all the cash you have for the day from your pockets, purse, etc. Count it and put it all into your wallet, or set some aside if you need it for a specific expense (e.g., lunch money, paying bills).

Time required:

Two minutes.

6. Unsubscribe from Junk Email and Catalogs

Receiving emails and print catalogs with discounts and promotions often leads to unnecessary spending. Saving 20 percent on a purchase isn’t saving any money at all if you have to spend $100 to save $20. Getting rid of these communications can help you avoid impulse buys and save money.

Action:

Look through your inbox and unsubscribe from one retail email list. By law, there must be an unsubscribe button at the bottom of every email, but it might take a minute to find it. All you have to do is click the button and confirm. You should also look around your house for catalogs you no longer wish to receive. Call or email each company to have your name removed from their mailing lists.

Use services like Catalog Choice and UnRoll.me to streamline the entire process.

Time required:

Five minutes to eliminate a few unwanted subscriptions.

7. Find Coupons for Necessities

There are some products that you are going to need no matter what they cost, so don’t pay more than you have to for each item. Using coupons for necessities such as dish soap and napkins can save you a lot of money.

Action:

Look through your daily newspaper or browse the Web for coupons for necessary items like toilet paper, garbage bags or paper towels. Cut the coupons (or print them from the Internet), then put them in your wallet so you have them next time you buy these necessities.

Time required:

Three minutes.

8. Pack a Meal, Coffee or Snack

Making your lunch at home and bringing it to work or making coffee at home instead of buying it at the drive-through is not only healthier for you, but cheaper as well. Going out for lunch or coffee each day quickly adds up, costing you hundreds of dollars, when you can make lunch and coffee for a fraction of that cost at home.

Action:

Check your kitchen for what you could bring as a snack or for lunch. Place it with your purse or car keys so you don’t forget it when you leave. Or, make coffee at home and use a travel mug to take it with you.

Time required:

Two minutes.

9. Find Something Free to Do

It’s possible to get out of the house and enjoy yourself without spending any money, but many people often overlook this tactic. Dinner and a movie can end up costing a couple more than $100, which is money that could be better spent on groceries or paying off credit card bills. Enjoying free activities in your area allows you to use your extra income for more important things that can greatly benefit your personal finances.

Action:

Check your local paper or search local websites for listings of free activities you can enjoy. Look for nearby parks, free concerts and movies, and special community events. Choose one you would like to do and write it down in your calendar so you don’t forget about it.

Time required:

Three minutes.

10. Set a Daily Spending Limit

It’s important to set a spending limit each day when you are trying to improve your financial situation. Spending limits allow you to save money and avoid overspending on impulse purchases.

Action:

Decide how much money you will realistically need to spend today. If you have payments due for bills, take that into account. Choose an amount that doesn’t allow for impulse buys or excessive spending.

Time required:

One minute.

11. Plan Your Daily Errands

Planning your errands for the day is just like planning your budget for the day—it keeps you on track and in control. Plan your errands to avoid the places where you tend to overspend and visit the places you need to go in the most logical order. This planning will save you time, gas and money.

Action:

Write a list of errands you need to complete. Then re-write the list in the order you will complete each task. Make sure you stick to the list so you don’t go somewhere you didn’t intend to go and spend money you didn’t plan on spending.

Time required:

Two minutes.

12. Turn off Lights and Appliances

This is one of the easiest ways to save money. Turning off the lights and appliances in your home, office or apartment can save you a significant amount of money when it comes to your monthly electric bill. It’s important to save money this way because it is simple, saves you money and helps the environment.

Action:

Take one lap around your home, office or apartment. Turn off all the lights and appliances that are not being used.

Time required:

Two minutes.

13. Do Comparison Shopping Online

Comparison shopping is one way to make sure you don’t overpay for anything you need to buy. The bigger and more expensive the purchase, the more important it is to comparison shop. This will help you save money and make a better-educated purchasing decision.

Action:

Choose an item you want or need to buy. Look for the item on at least three different retail websites. Check the features, details, availability and price of the item to see which website has the best deal.

Time required:

Five minutes.

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