Students: Establish Good Financial Habits Now
Add establishing good financial habits to your back-to-school to do list! We all develop habits that provide a rhythm or structure to our daily lives. Once these habits are developed, they can be hard to break. Forming strong financial habits early provides control of your financial life. Here are six financial routines to adopt that can help you build a strong foundation and reach all your financial goals:
1. Be organized. Set up a system for tracking and paying your bills on time. Paying online is not only quick it also ensures your payment “isn’t lost in the mail” and you have receipt or digital record of your payment.
2. Planning to work part-time while in school? Use direct deposit for your paycheck if possible. It’s safer, more efficient, and your funds are available sooner. Even better, have a portion of your check deposited to your savings.
3. Creating a personal budget can help you focus. Analyzing your expenditures on a regular basis will help you monitor your spending and develop smart spending habits. You will also be able to monitor your progress toward your long term financial goals. Financial software or applications, like mint.com, YNAB, and PageOnce (cross-platform) can help you track and organize spending electronically and securely.
4. Review your bills and statements regularly. Errors do occur. You’ll want to make sure you catch them ASAP.
5. If you plan to obtain a credit card, avoid late fees and interest charges by paying off your balance monthly and on time. If you can not pay your balance in full, pay as much as you can. The longer it takes to pay off, the more you’ll pay in interest.
6. Watch out for fees and overdrafts. Some fees can not be avoided, but choosing to walk an extra block to use an ATM that does not charge a fee instead of using one outside your network can be worth the effort. Also, be sure to understand any fees that may be charged on your checking or savings accounts based on minimum balances or excess transactions. Don’t pay if you do not have to.
Your habit of a morning coffee may be a good start to your day. A few good financial habits can be the start of a good financial life.