14 Financial Habits To Start In 2024 (2024)

Financial habits are key to managing your money in the best way possible.

This is because habits are actions you take on a regular basis that become second nature to you. When you build financial habits, you’re putting your money to good use and creating the kind of financial future you want.

There are many benefits to habits including helping you reach your goals, increasing self confidence, and increasing your quality of life.

Today we’re talking about 14 financial habits to start this year.

#1 Budgeting

Budgeting allows you to see where your money is going every month.

Without a budget, you don’t have a clear idea on how much you’re spending in a particular category. This is why budgets are necessary.

How do you start a budgeting habit? Start by calculating your total monthly income and tracking your spending. It’s really that simple.

There are so many budgeting methods out there including budgeting apps, budgeting planners, and budgeting excel sheets.

Here are popular categories to have in your budget:

• Housing (mortgage/rent, HOA fees, property taxes)
• Utilities (electricity, water, garbage, phone, internet, cable)
• Transportation (car payment, insurance, maintenance, gas)
• Food (groceries, restaurant)
• Medical (insurance, primary care, dental, medications)
• Insurance (health, home/renters, auto, life, disability)
• Household (toiletries, laundry/kitchen supplies)
• Personal (gym memberships, haircuts)
• Debt (student loans, auto loans, credit cards)
• Retirement (financial planning, investing)
• Fun money (subscriptions, concerts, movies, vacations)

Read this: 8 Steps To Create A Realistic Budget

#2Negotiate bills and take advantage of discounts

Did you know several of your monthly bills can be negotiated or discounted to a lower rate?

To get discounts on bills, call the customer service provider and ask them if they have any discounts available.

You can also say you’re shopping around at other providers because you’re trying to find the best price possible, and that might get them to give you a discount because they don’t want to lose you as a customer.

Bills that have discounts include:

• Car insurance
• Cell phone bills
• Cable
• Internet
• Satelite radio
• Home security

For example, State Farm has a ton of discounts a lot of people don’t know about. These discounts include accident-free discount, defensive driving course discount, good driving discount, drive safe and save discount, multiple auto discount, and many more.

#3 Set financial goals

Having financial goals is crucial because it keeps your mind on the prize. You’ll want to keep up your healthy financial habits because it’ll lead you closer to achieving your financial goals.

For example, your financial goal may be to retire by the time you’re 50 or it’s to save 20% for a house downpayment.

Having a financial goal keeps you motivated and inspired to keep going to create the financial future you want to live.

Financial goals to choose from:

• Invest 15% of my income to 401(k)
• Save 6 months of living expenses into emergency fund
• Pay off credit card debt in full
• Save enough money for a car

Read this: 8 Finance Goals For Wealthy Life

#4 Start a side hustle

Start a side hustle habit by choosing a side hustle and doing it on a consistent basis. Side hustles are great because they bring more money home and it creates more income sources.

So if you ever lose a job, you still have income streaming in.

What are some of the best side hustles to start right now?

Side hustles to start now

• Sell printables – #1 recommended side hustle for people looking for a low-stress way to earn passive income from home.
• Pinterest Virtual Assistant – Help businesses shine on Pinterest as a Pinterest manager. Create your own schedule, work for yourself, and work from anywhere in the world.
• Sell dog treats – Make up to $2,500 a month selling dog treats with this fun side hustle perfect for people who love dogs.
• Proofreading – Earn $20+ an hour proofreading from home. Be your own boss and set your own schedule.
• Surveys – Make money for answering simple questions. You can take as many surveys as you want and earn up to $5 per survey.
• Bookkeeping – Start your own virtual bookkeeping business and earn up to $80,000 a year from home.

Read this: 10 Side Hustles For People Short On Time

#5 Pay off all debt

Learning the habit of living debt-free feels incredible and removes a lot of unnecessary stress.

Some habits of debt-free people include never carrying a credit card balance, budgeting, negotiating bills, using cash, and talking about money with their signifiant other.

If you’re struggling with debt right now, it’s okay and we’ve all been there. Many of us are still working on getting out of debt. Fortunately, there are a lot of ways to get you out of debt.

This includes cutting down on spending so more of your money goes to debt.

You can also negotiate a higher salary, get a different job that earns more, or get side hustles to increase your earnings so you can put more money to your debt.

And one of the best things you can do to pay off all debt is stop accumulating more debt. Stop buying things unless you have the money to pay cash for it or if you can immediately pay off the credit card balance that same day.

Read this: 7 Step Guide To Pay Off Credit Card Debt Fast

#6 Talk about finances with the family

Learning to regularly talk about finances with your spouse and other family members living in your home is so important. This makes talking about money normal and gets everyone on the same page.

Not sure how to talk to your family about finances? Here’s a great article on doing just that.

Talking about money with your family will help you reach goals faster. For example, my husband and I talk about our finances all the time, particular our budget and retirement goals.

Since we do this, we’re always on track with our spending and know when to dial it back in a certain category. This is because we’re always checking in with each other and updating the other person on the budget.

#7 Set up automatic savings

One of the easiest habits you can start today is setting up automatic saving transfers.

On days you receive a paycheck, you can set up automatic savings in your bank account. So let’s say your paychecks are $1000, you send $100 of that automatically to your savings account.

This makes saving money effortless. This is called the “pay yourself first method”.

To find out how to set up automatic transfers, all you have to do is type in “your banks name + automatic transfers into savings” on Google or call your bank to learn how to do this.

I personally use Ally Bank account and they make automatic transfers super easy.

Ally Bank even has extra saving features including Round Ups and Surprise Savings.

Round ups are when Ally tracks your Interest Checking accounts for transactions and round it up to the nearest dollar. Once you accrue at least $5 in round ups, Ally transfers it to your savings.

Ally Bank also offers Surprise Savings, which is when Ally analyzes your linked checking accounts for safe-to-save money, then transfer it to your savings so you don’t have to.

#8 Stop borrowing money

One of the best habits you can start now is learning to stop borrowing money.

Borrowing money includes taking out loans or having credit card balances that aren’t paid in full.

Of course, there are times where you may need to borrow money such as for student loans or mortgages, but other than that, borrowing money doesn’t do you any good.

That’s because loans and credit cards typically carry very high interest rates, so you’re paying way more for something than you need to be.

Instead of putting a large purchase on a credit card and waiting a few months to pay it off, make sure you’re saving enough money for whatever you’re buying and paying it off immediately.

#9 Read personal finance books

Reading about personal finance is one of the best ways to become knowledgable about money.

There are so many amazing books out there that can teach you about budgeting, investing, retirement, and other key things we are not taught in high school.

Libraries have all kinds of personal finance books so you don’t even need to spend any money to read these books.

Some of my favorite personal finance books include:

• The Total Money Makeover
• I Will Teach You To Be Rich
• The Simple Path To Wealth

Read this: 10 Best Personal Finance Books To Read

#10 Invest regularly in 401(k)

The very best thing you can do for your finances this year is starting to invest in your 401(k) if you haven’t already. Compounding and time in the market is key to building a healthy retirement plan.

Wherever you work most likely has a 401(k) that you can take part in.

Set this up by contacting HR and they’ll tell you how to get started. If you’re not sure what to invest in and how much, I recommend checking out this investing course that teaches you exactly what to invest in and how much you should be investing depending on how old you are and how much money you need in retirement.

Don’t put off investing for your retirement any longer.

Read this: Beginner Guide For People Completely New To Investing

#11 Get that emergency fund going

If you don’t have an emergency fund yet, now is the time to start. Any amount of money is better than nothing in an emergency fund.

A good rule of thumb is to have 6 months worth of living expenses in an emergency fund. That’s just the main goal, so don’t get overwhelmed by how much money that is for you.

Instead, focus on saving 1 months worth of living expenses and then 2 months, and then 3, and so on.

For example, if your required living expenses cost $3,000 a month, you’ll want to save $3,000 x 6 months = $18,000 into your emergency fund. Note that I said required living expenses.

You might be spending $500 on fun money every month, but I personally don’t think you need to count that because in emergency case situations where you lose your job, you won’t be spending money on “fun” spending, only the necessary spending like mortgage, food, insurance, etc.

The best place to put your emergency fund is in a high yield savings account. This is because these accounts earn a good chunk of interest and they’re also easily accessible.

I park my emergency fund in an Ally Savings Account that is currently earning over 3.5%.

Read this: 5 Step Guide To Starting An Emergency Fund

#12 Cook more meals at home

Learning how to cook healthy meals at home is great for your health and budget. Contrary to popular belief, cooking healthy meals at home can be incredibly affordable and save you a ton of money on food.

Let’s say you’re someone who goes out to eat 3x a week with your spouse and the check is typically $50. $50 x 3 meals = $150 a week.

$150 a week x 4 weeks = $600 for 1 month of eating out at restaurants.

If you dial that back to just 1 restaurant outing per week, you’ll only spend $200 a month on restaurant outings.

That’s a $400 savings that can go somewhere more important like your savings or retirement accounts.

Some of my favorite budget cookbooks include:

• Plant Based On A Budget
• Budget Bytes
• Good And Cheap: Eat Well On $4/Day

Read this: 50 Healthiest Foods For A Tight Budget

#13Review your financial plan

It’s always a great idea to review your financial plan to make sure it’s working. You can do this monthly or annually.

What exactly should you review?

You’ll want to review how your budget, investments, and cash flow are doing. You might discover that you’re not investing enough money and need to increase your investments next year.

Or you may find that you’re spending way too much money on entertainment and want to dial it back. That’s why reviewing your financial plan is key.

It allows you to make changes.

Investopedia haș a helpful article on what your financial planning review should look like.

#14 Take care of your home and vehicle

If you want to save a ton of money and do your best to avoid annoying issues like your car breaking down or AC blowing out, get on a regular maintenance schedule for your home and vehicle.

Your home is likely your most expensive purchase and it requires regular maintenance.

For example, you’ll want to make sure you’re on top of things like:

• Cleaning out gutters regularly so there are no blockages
• Making sure windows are sealed properly
• Yearly inspections with an HVAC technician
• Keep your dryer vent clean
• Hire pest control if necessary

Zillow has an amazing checklist that shares what you need to know to take care of your home.

Regular vehicle maintenance should include:

• Changing your oil regularly
• Checking tire pressure monthly and rotating tires whenever your car manual says you should
• Changing air filters when necessary

Buzzfeed also has a handy car checklist for taking care of your vehicle properly.

Here are the 14 financial habits to start this year.

• Budgeting
• Review your financial plan
• Set financial goals
• Start a side hustle
• Pay off all debt
• Talk about finances with the fam
• Set up automatic savings
• Stop borrowing money
• Read personal finance books
• Invest in a 401(k)
• Set up an emergency fund
• Cook more meals at home
• Negotiate bills and take advantage of discounts
• Take care of your home and vehicle

Make this a great year by creating financial habits. Habits make money fun and effortless and they get you on track to your goals much sooner. You can do this.

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