Yahoo Movies ‘Groundhog Day’ Inspiration: 9 Financial Habits To Repeat Over and Over Again
In honor of Groundhog Day — both the fun little Pennsylvania tradition in which residents await sightings of a groundhog named Punxsutawney Phil, and the 1993 movie starring Bill Murray in which he must relive the same day over and over again — we asked financial experts for advice on financial habits you definitely want to put on repeat. Here are nine good ones to practice persistently.
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Regularly Check Your Balances
If you only check your bank and credit card accounts when it’s time to pay bills, you’re missing out on important info, according to Maggie Klokkenga, CFP, CPA, financial coach and planner with Make A Money Mindshift. “If the balances are significantly different from what you were thinking, review the week’s transactions. This will help you to keep a better pulse on your daily spending as well as help you to stay more mindful that next time you want to make an impulsive purchase.”
“It will also help you identify any fraudulent activity and notify the bank or credit card company before any further damage is done,” she added.
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Pay Yourself First
One of the most important financial habits someone can create is to pay yourself first, said Brian Carney, a certified financial planner and co-founder of RiversEdge Advisors. “This is a very simple strategy that involves treating savings as a required bill and selecting a dedicated amount of money to save every month.”
You can automate a debit from a checking into a savings or investment account quite easily. “People who start this habit will find that they become fiercely dedicated to their plan and actually start spending around their savings.”
Engage in Dollar-Cost Averaging
If you’ve got money to spare beyond what you put into your emergency fund, you should engage in dollar-cost averaging, according to Nikos Melachrinos, co-founder and CEO of Quirk, a personal finance app for Gen-Z.
“Every month, set aside a specific amount and put it into the stock market. Your best bet would be low-cost index funds (like the VOO or MSCI) which you set and forget for a few years at least.”
Pay Your Bills On Time
Not only is it just good sense to pay your bills and loans on time each month, but doing so “is a good financial habit in general and in particular to help your credit score,” said Amanda Wallace, head of insurance operations with MassMutual. “If there is nothing else you do, just pay on time. In fact, in recent MassMutual research with young adults, only 52 percent knew that their history of making payments on time can have one of the biggest impacts on their credit score.”
Ask for Cash for Kids’ Birthdays To Put Into a College Fund
A financial habit that is valuable to adopt and repeat, is to ask family and friends to contribute to your child’s college savings account instead of giving other gifts, said Patricia Roberts, author of “Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans” and COO at Gift of College Inc.
“The gift giver wins by giving a gift that can grow with the child…the child’s parent wins by having a bit of support in saving for an important goal that can seem insurmountable given the high cost of higher education.”
Pay Your Credit Card Balance in Full
Who wouldn’t rather make a small credit card payment over a large one? However, doing so is a surefire way to accumulate more debt through interest and late payment penalties, said Ian Sells, founder and CEO of RebateKey. “Instead, make it a habit to pay off in full each month.”
Verify, Verify, Verify
To protect yourself against fraud, Josh Richner, market and outreach coordinator for Nationallegal.com urged, “Every time you get a call about anything related to finances — even a seemingly simple purchase — confirm and verify that they are who they say they are. Our world is rife with fraud. Deal with any unsolicited conversation with a healthy amount of skepticism.”
Turn on Automatic Savings
The easiest and most repeatable habit to start on the road to financial success is turning on auto-savings, said Katherine Fox, CFP, founder and advisor at Sunnybranch Wealth. “It is essential to get into the habit of putting away as much of your paycheck as you can into savings every month. Once you have sufficient cash reserves, these savings can be directed into a retirement or taxable account to allow you to take advantage of the huge benefits of compound interest.”
Massena continued, “This habit becomes especially important when you get a raise or a new job making more money. If you put a portion of your new, extra income immediately into a savings account you will be saving more and also avoid letting lifestyle creep erase your future financial success.”
Talk Openly and Honestly About Your Finances
Money can be quite personal, and thus hard to talk about. Our financial behaviors can be an expression of our values and beliefs, according to Emily Koochel, PhD, senior financial planning education consultant at eMoney Advisor.
“Often when we are talking about money, we aren’t talking about money at all. With these emotional underpinnings it may seem easier to avoid the conversation all together. However, financial transparency — whether with your financial advisor or significant other — is critical to creating a successful financial plan.”
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This article originally appeared on GOBankingRates.com: ‘Groundhog Day’ Inspiration: 9 Financial Habits To Repeat Over and Over Again
