‘Tis the season to give thanks! The power of gratitude and positive thinking is well documented—including when it comes to your finances. So, as Thanksgiving nears, here are four financial habits to be grateful for.
Making a budget is one of the smartest financial habits you can adopt. At its heart, budgeting simply means understanding how much money is coming into your household, then planning out when and how that money will be spent. So, if you’ve ever taken the time to think through how you’ll spend your hard-earned money during the next month—congrats! You’re already budgeting, and that’s something to celebrate.
If you want to level up your budgeting skills, play around with some different budgeting strategies to see which works best for your household. The 50-30-20 budgeting framework advises dividing money into needs, wants and savings, while zero based budgeting helps you categorize key expenses. You might also check out a budgeting app, keeping in mind that you don’t need fancy tools to create a budget. A pen and paper will do just fine.
Saving can be a tough financial habit to adopt, particularly in a time when gas and grocery prices are higher than expected. That’s why it’s so important to give thanks for the moments when you do manage to save. If you choose to fix lunch at home instead of going out, write down your approximate costs to see how much you saved. Celebrating each savings win can provide motivation to save more next time!
And, speaking of saving more…if you don’t already have an emergency fund, this may be a good savings goal to work toward. Experts recommend building an emergency fund which can cover three to six months worth of expenses. Then, if an unexpected cost arises—think: a broken radio or car repair—you’ll have a financial cushion ready to soften the blow.
When used smartly, credit represents an important element of financial wellness. Examples of wise credit usage include working with a reputable mortgage lender to get a home loan, making full-statement monthly payments on a loan or credit card, and taking advantage of credit card cash-back benefits without accruing interest due to unpaid bills.
If you’re looking to have even more to give thanks for next year, then it’s time to tackle less-than-wise credit usage. Typically, risky credit habits come down to spending money you don’t have. Instead of relying on credit cards or high-interest loans, build a budget first and see if you can rethink monthly household spending to fit your means. A free meeting with a financial counselor can help.
One major benefit of online banking is the ability to automate bill payments. If you’ve already set up automatic recurring payments to utility companies, a landlord or other merchants—congrats! By automating bills you’re taking an important step to protect yourself from late fees, and that’s a great reason to be thankful. Plus, bill automation is secure, saves time, and can protect your credit score.
Besides automating bills, you can also consider automating your savings for a special occasion. Check out Club Savings Accounts from Harvard FCU, which accept regular contributions throughout the year via automatic payroll deduction, then transfer the accumulated funds to your savings account on a scheduled date—all helping you save for a specific expense, such as a summer vacation or holiday shopping.