Many Americans grow up learning healthy habits when it comes to eating and exercise. Health and gym class are mandated in schools across the US, but what about money management? If you didn’t learn about good money habits at home, chances are you’re like many Americans who’ve missed out on a real financial education.

So how do you get in the habit of something many of us are learning for the first time, in our 30s, 40s, 50s and beyond?

At EarnUp we work with thousands of people to get them on a path to financial well-being. Here are some tips we’ve learned about getting on the right path.

First thing’s first: make sure you have a budget to guide your monthly spending. Not having a budget is like going on a road trip without a map. You need something to keep you on course. It’s hard to build a habit when you’re winging it. Having a plan can hold you accountable and keep you in check. Just as important as having a budget is automating it as much as you can. It’s the best way to set yourself up for success. Automatically transferring savings from your paycheck, setting up autopay for bills and using loan management platforms like EarnUp can largely do the budgeting for you.  

Once you have a budget, try to avoid having wide swings in your budget. If you’re consistently $10 over your food budget, it’s okay. If it’s closer to $200 each month, that’s something that needs prompt attention.

Be mindful about your money: the more you track your spending and goal progress, the more awareness you’ll have of necessary adjustments to keep things in check

Being debt-free is a big financial priority for many people, and paying debt the EarnUp way is a way to make progress more quickly. Consider putting bonus money towards debt when you have it. According to Lifehacker, “consider these financial windfalls as already earmarked for debt repayments and you’ll see your debt disappear much more quickly than if you just made your standard payments.”

Keep your eye on the prize: think big about where you want to go with your money. Yes, those student loan balances feel overwhelming and retirement may feel like an eternity away. Imagine what future you will feel like when those balances are behind you or as a first-time homeowner. Use visualization as a motivator to stay on track with your goals.

Speaking of visualizations, consider the “how much will I care about this tomorrow?” test. It’s an especially good way to protect yourself from impulse buys and save more money for your goals.

We’ve found that the best way to build a habit is to make it so easy you barely have to think about it. Have fixed expenses come out of your paycheck before you see them hit your bank account. That way the budgeting is already done for you, and you can be certain that anything leftover is safe to spend.

A widely held belief is that it takes 3 weeks to form a habit. That’s less than one month’s cycle on the EarnUp platform. At the end of the day, budgeting takes time and effort. Building healthy money and budgeting habits takes work but there are many tools and resources to make it easier. Getting your loans on EarnUp can help pay down debt sooner, meaning less money goes towards interest. Over time, you can free up your cash flow so that you can hit other financial goals in the future.

On top of starting good habits that you don’t have to think too hard about, consider making your money work for you without doing the work. Frontload savings early in the year, especially for retirement accounts. If your goal is to max out your 401k or IRA contribution, do it early in the year so that money can gain interest sooner. Even if it makes your budget feel tight, it will train you to stay lean. That way you’re forced to be better about budgeting throughout the year.

At the end of the day, it’s all about making progress. Every step forward is a big achievement towards your goals. This stuff isn’t easy, so don’t be too hard on yourself.

 

EarnUp blog content is for educational purposes only. Information shown is for illustrative purposes only and is not intended as financial advice. Please consult a financial adviser for advice specific to your financial situation. EarnUp makes no guarantees as to the accurateness, quality, or completeness of the information and EarnUp shall not be responsible or liable for any errors, omissions, inaccuracies in the information or for any user’s reliance on the information.