Many people tackle financial resolutions at the start of the year. While it’s already February, there’s still plenty of time to make changes to improve your finances in 2024. Developing new money habits is one way to set yourself up for success in the coming months and years. I’ll share several money habits to start in 2024 that could transform your finances for the better.
1. Monitor your spending
Many people spend their money with little thought, making purchases without looking at their bank account balance. But this isn’t the best approach. You should be aware of how much you’re spending so you can make more informed choices.
This year, get into the habit of monitoring your spending. Once you know how you’re spending your money, it’s easier to make changes to waste less money. You can use one of the best budgeting apps to stay on track. Tools like this make it easier to be informed and learn how to adjust your spending habits so you can free up more money for your financial goals.
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2. Open a high-yield savings account
If you’re already saving money, that’s excellent news. But ensure you’re earning interest while you save. Keeping your emergency fund in a checking account is not recommended. Since most checking accounts don’t earn interest, you won’t get rewarded for saving.
Keep your extra cash in a high-yield savings account. Why? You’ll earn interest as your money sits in the bank. This simple change could help you boost your account balance. Opening an interest-earning bank account is an easy way to make financial progress.
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3. Avoid credit card interest
Credit card debt is stressful for many Americans. But you can avoid it by making the right money moves. When you use credit cards to make purchases, you’re borrowing money. You’ll need to pay your credit card issuer back.
Many people rack up credit card debt because they pay only the minimum amount due listed on their bills. You’ll be charged interest if you only pay the minimum amount due. Since credit card interest is expensive, debt can pile up quickly.
This year, change your habits. Whenever possible, pay the entire statement balance listed on your bill. By doing this, you’ll avoid paying credit card interest fees and stay out of debt.
4. Pay yourself first
Many people hope to save but have little extra money left in the bank before their next paycheck arrives. If this sounds familiar, I have a suggestion: Pay yourself first. When you treat your savings like a bill, you’ll prioritize your savings.
Here’s how to pay yourself first: Every time you get paid, immediately transfer a portion of your paycheck into your savings account. Doing this will ensure you don’t accidentally spend the money you intend to save. But if you’re forgetful, take advantage of automation tools.
Automating your savings can be a game changer. You can set up automatic transfers through your bank so your savings are on autopilot. Once you do this, money will be transferred regularly to your savings account. This simple change can result in big wins.
5. Use a credit card that earns you rewards
You’re missing out if you’re using credit cards and not earning rewards. Many people use credit cards to earn cash back rewards or other rewards when they spend money. Getting into the habit of using a rewards credit card at checkout can be a win for your wallet. Check out our list of the best cash back credit cards to learn more.
Small changes make a big difference
You don’t have to make massive changes to transform your finances. Small money moves and habit changes can add up over time. The above suggestions may help you improve your finances in 2024. For more money-related tips, review our free personal finance resources.
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