View all Personal Finance articles

The Top 4 Money Habit Changes to Make Now

, by Rob Kaufman

Often, the reason we don't have the money we want (or need) is because of the financial decisions we make. Maybe we spend too much on things we don't really need. Perhaps we don't have a budget in place and don't realize we're not bringing in enough money to cover our expenses. Whatever we're doing wrong can be fixed if we change some of our habits. "Which habits?" you might ask.

Here are the top 4 habits that need to be changed to help your savings grow...

  • Save more while paying yourself first

Easier said than done. That's why it's important to begin slowly.

Start by committing to save 1% of your monthly income. Gradually increase that every six to eight months until you reach 10% to 15%. You might not reach that percentage, but the fact that you've committed to 1% gets you used to saving and seeing positive results.

Just as important is to make this saving process "automatic". Before you pay bills or make a purchase, make sure the percentage you want to save is automatically placed into your 401(k) or into a savings account that you do not touch. This is known as "paying yourself first" and should help your savings grow faster than you ever expected.

  • Use your credit cards for fixed expenses only

Many of us get into financial trouble by using credit cards without remembering there's a bill coming at the end of the month. We have dinner out a few times a week or make a few impulse purchases online. Before we know it, we've spent a few hundred (or thousand) dollars without the income to pay it off.

One of the best ways to help stop that from happening is to use your credit cards to only pay for your fixed expenses. If possible, automatically pay your rent, mortgage, utilities or other fixed monthly expenses on your card. This allows you to build your credit (since your bills will be paid on time) while also getting points from your credit card company. And the best benefit? Since your cards will be used for fixed expenses only, you won't overspend and get into debt.

  • Cut Your Expenses

Take some time and think of three things you could live without. For example: do you really need that online subscription you rarely use? What about the meal you had delivered because you didn't feel like cooking? Or that expensive jacket you bought to help lift your spirits?

Look over your monthly expenses and select three (or more) products, services or "things" you can live without. Once you do, you can put that money to better use, like saving it or paying off debt. Plus, by keeping an eye on your expenses, you'll know where you're spending your money which is the first step in preparing the all-important budget (see #4)

  • Create a budget

The first step in creating a budget is knowing the numbers. That means you need to know your exact income and expenses. If you don't use financial software, you probably have access to your bank and credit card statements. Check them carefully so you understand where and how you spend your money.

Once you know how you're spending your money, you can start to pare down expenses - starting with the non-essentials (see #3). You don't want to cut everything out at once. Doing that will make you feel deprived and will eventually lead back to spending more than you should. Take it slowly and be sure to keep an eye on your income versus expenses at least twice a month. This will help you stay on track... and within your budget.

It's easy to see your FICO Score range for FREE. Just click or tap right here .

Rob Kaufman

Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.