It’s estimated that 25 percent of new year’s resolutions are to spend less and save more. In other words, develop smart money habits.
Developing smart money habits really boils down to your goals. Some have ambitious goals and dream of finally banking their first million. Others like to take it one step at a time.
Regardless of who you are there’s always more to learn when it comes to money.
That said, here are five smart money habits that you can bring into the new year:
1. Work towards a single goal
When it comes to setting and tracking goals you need to always strive for a larger, quantifiable target. On January 1st of 2018 you should set a single financial goal that you want to work towards.
Set it up so you can check back on yourself on December 31st, 2018 and measure to see whether or not the goal has been met. In order to properly measure it you need to quantify it. For example, you may set a goal of putting away 20% of your earnings into a savings account by years end. Or you could shoot to double your current salary by year’s end. While a bit different both of these goals can be quantified and definitively achieved (or not).
2. Create Monthly Budgets
When you set your main goal it’s important to break up the rest of the year into smaller goals or milestones. That means developing a system so you can stay on track.
The majority of us want to develop habits around spending and saving money. The best way to do this is to create monthly budgets and follow them to a tee.
The budget will not only keep your spending on track but will give you a better understanding of your spending habits as a whole.
3. Commit to ‘No Spend Weeks’
One of the best ways to kickoff a month of savings is to have a no-spend week. This means you only money on your necessities. Try to avoid spending on conveniences like driving to work, eating meals out, and other random purchases.
The reason why you should practice committing to these weeks is you ultimately want to commit to a no spend month. If you try to jump straight into a month however it’s likely you’ll cheat a few times.
The goal of this exercise is to allow you to reevaluate your spending habits and look for low-cost alternatives to your everyday purchases.
4. Save Bonuses
If you’re lucky your job will allow you to earn bonuses, overtime, and or promotional pay. If you work in sales and have the luxury of a salary plus commission compensation plan then you could put commissions in this bucket as well.
Anyways, you should try to immediately put this bonus cash into savings. Since you’ve structured your lifestyle around surviving off your normal salary you shouldn’t need to spend this extra cash. That said you can justify sticking it right into a savings account for later use.
5. Build Your Knowledge Daily
In order to truly progress financially you need to build your knowledge. You should try to spend at least 20 minutes every single day learning more about money as a whole. Try to explore different areas to see if you’re more interested in one over another.
For example you could spend a week studying the stock market and the next learning how to make money trading cryptocurrency. The more diverse your knowledge the better decisions you’ll be able to make around your finances.
Smart money habits aren’t learned overnight. In fact, some individuals spend a whole lifetime without figuring them out. If you want to make 2018 your year then try and adopt one or all of the five smart money habits listed above.
Related: Terrible things people do for money