Personal Finance: Healthy habits for money to get started now

“I just got my tax refund, it’s time to go on vacation!” I can’t tell you how many times I’ve heard this increase and now I see it on social media every day. Early in my life, I realized that the way I manage money is very different from most people I know. I’ve always been puzzled because I’ve never fully understood how people can spend money without ever thinking about saving or retiring. Here are some basic habits you can start now to ensure financial security in the future:

1. Saving for retirement as early as possible is the most rewarding thing you can do. Even if it’s only $ 50 a month, which is the minimum for most plans, you can secure thousands and thousands of dollars in retirement. The earlier the better. For example, a 25-year-old who saves $ 200 a month until age 65 and earns exactly 6% of the savings each year would make about $ 400,000. But a 40-year-old who pays the same amount every month at the same rate of profit would only make $ 139,600 by the age of 65.

2. Never carry a credit card balance with an interest rate. This is one of the fastest ways to accumulate a debt that can burden you for the rest of your life. When you have to use a loan and you cannot pay in full every month, look for 0% interest. Many promotions range from six months to a year or more. If used responsibly, they are essentially a free loan. Just be sure to pay their entire balance before the end of the term, otherwise you will receive retroactive interest, which can add hundreds of dollars (if not more) to your debt.

3. Instead of buying a new car or leasing, try to save and buy a good used car for money. What you save between interest, depreciation, taxes, license plates and insurance will save you thousands. According to, buying a car that is two years old is your best bet because you are avoiding the biggest drop in depreciation. Owning it for three years and then selling it will also benefit you because you see another big drop after year five due to the long-term maintenance that is usually required at this point. If you can’t afford a two-year-old car without having to borrow, then staying a little older with long-term maintenance repairs (and if possible low miles) is your best bet.

4. Avoid eating out if you can. The average American eats 4-5 times a week, spending an average of $ 232 a month or about $ 2,700 a year. If you forget to eat out for two years, you would actually save enough to buy a good used car like the third item above.

5. The last thing and perhaps most important is to think long term. The worst way to justify the costs is to do so on an individual basis relative to the monthly or annual sum. Take eating out, for example: while it may only cost you $ 10 per meal, be sure to consider that if you do it three times a week for a year, you would spend more than $ 1,400. The same logic can be applied to almost anything – clothes, vacations, furniture, coffee, expedited delivery, etc. Every time you’re about to spend money, think about how much it will cost me each year.

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