Have you ever looked at your transaction history in your bank account and were shocked about where your money went or how quickly you spent your money? You are not alone! Below are some helpful tips on how to help with managing your money.
One way to start having healthier finances is to avoid impulse purchases. CNBC reports that Americans on average spend about $450 per month or a total of $5,400 per year because of impulse spending (CNBC, 2018). How can you solve this problem? Implement the 24-hour rule: if you want to purchase a non-essential item, wait 24 hours before buying it. Crystal Bailey, a former manager for Northern Trust Bank, stated during an interview, “Whenever your purchases are not in line with your overall financial goals, they more than likely will work against your goal. Financial success does not happen by accident. It is the result of focused spending and strategic planning.”
Another healthy finance tip is to set up a savings account and put at least 20% of your income in your savings. According to Yahoo Finance, as of 2019, “nearly 70% of Americans have less than $1,000 in a savings account” (Yahoo Finance, 2019). Having at least $1,000 in your savings account is important because it allows for you to have a safety net just in case an unexpected event occurs. It is important to note that $1,000 in your savings account should be a starting goal, but one should aim to have 3-6 months of living expenses covered. However, the more money saved, the better. University of Illinois Urbana Champaign Student Isis Zollicoffer stated in an interview that “having a savings account helps me sleep better at night, because I know I have funds if an unexpected emergency occurs.”
Having healthier finances can lead to a healthier lifestyle. It can prevent you from stressing about unexpected financial situations. The steps you take today can help you reach your future goals like buying a car or house. Get money motivated and make better financial decisions. The time is now!