Give, Save, Spend: How to Adopt Healthy Financial Habits

Saving for the Future

Investing your money for tomorrow’s unknown circumstances is important. Not only should you save for the unknown but for things you may want to do such as buy a house or car, retirement, college expenses, and vacations. It can be difficult to determine how much to save each month when expenses can consume most of your earnings, but starting small is best. As budgeting becomes more manageable, you will find that you can save more. Here are some more tips you can put in practice:

• Start with what you can – If you can only save $10 a month, start there. As time progresses, pick up the value each month. Don’t beat yourself up if you must skip saving for a month or two.
• Save unexpected money – There are times we receive birthday money, a bonus check at work, a nice tax refund, or sold some items for cash. These can be used to save extra as they don’t impact your monthly budget.
• Automate savings – Whenever you receive pay from your job, you can set a portion automatically to your savings. This is helpful because you won’t need to set a reminder and will not feel tempted to take from your savings.
• Audit your budget – As you create your budget, it’s best to perform an audit to see what expenses can be removed or reduce. Instead of going out to eat several times a week, limit that to two or three a month. Try at-home fitness or a run around the block instead of a monthly gym membership. Create small pockets of savings for large purchases like clothes, shoes, mini vacations, and tech gadgets.

Spending Wisely

If you can’t afford it today, it’s not worth purchasing. One of the best ways to avoid overspending or spending within your means is by creating a budget. A monthly budget will allow you to look over your income, focus on tackling your expenses, and seeing if you have room to enjoy. There are some ideas to consider when starting out on creating a budget or new habits you may want to incorporate:

Track your spending – Write down everything you spend your money on. Whether it’s on an app, spreadsheet, or pen and paper, tracking your money will help you know where it’s going.

Remove unnecessary expenses – There are some subscriptions or services that you might be paying for but no longer use. It’s time to cancel and reallocate that money.

Switch phone plan – Instead of having the latest phone or upgraded phone plan, switching them for cheaper can help you save money.

Refinance car or mortgage – You can save extra money by finding a better rate on your mortgage or car loan.

Pay off debt early – Before adding extra funds into your savings, see if you can try allocating more money towards credit cards, student loans, and other debt so that you can pay them off early.

50/30/20 rule – If you need help creating a budget, try sticking to the 50/30/20 rule for managing your income: 50% for essentials, 30% for extras, and 20% for savings and debt.

Why Giving Is Important?

Thinking about and managing money leaves many people feeling stressful. It falls within the top five reasons for divorce in the United States. You might be surprised but giving some of your money to charitable organizations after budgeting can help increase happiness and have long-lasting effects on your overall well-being. In a 2018 study, psychologists discovered that when people give often, their joy last longer. The opposite was also true. Those in the experiment who gave less experienced a decline in happiness over time.

Whether you decide to give for a personal connection to a cause that matters to you, for community support and projects, or for increased of happiness, your charitable giving will go beyond kindness and will help you feel less inclined to overspend.