Establishing good habits isn’t always a quick fix, but rather something that pays off over time. For example, going to the gym regularly can help you feel better and get in shape, studying at a set time every day can help you manage your time more efficiently, and brushing your teeth twice a day can prevent cavities (hopefully!).
As with these examples, building good financial habits can pay off over time. By knowing where you stand with your money, you can put yourself in a better position to meet your financial goals now — and in the future.
But how do you start? Take a day-by-day approach when making changes to how you handle your finances. Here are some ideas for financial habits: try working a few into your daily routine, then add more over time.
1. Regularly check your credit score and your credit history.
Your credit history and score can affect important things like your bills and your car insurance, but checking your credit doesn’t have to be scary! In fact, regularly reviewing this information and actively looking for red flags can help protect you from identity theft and other things that might be harmful to your credit score.
First, check your FICO® Credit Score. Wells Fargo Online® customers can get their FICO® Credit Score for free, score factors, and more.1 Next, request free copies of your credit report from each of the three major credit-reporting agencies (Equifax®, Experian®, and TransUnion®) via AnnualCreditReport. You can request one report from each agency once per year, so you could check your credit history every four months.
2. Set up alerts for your bills.
Missing a bill payment can result in costly fees and also hurt your credit score. Make it a point to stay on top of your payments by setting up account alerts, using auto pay through online Bill Pay, or setting up automatic payment to your debit or credit card.
3. Categorize your spending for the past three months.
Getting a clear picture of your spending habits helps you see where you may need to cut back. Make it easy to categorize and track your spending with a tool like My Spending Report. Every dollar you spend is sorted into familiar categories automatically, and you can adjust as needed.
4. Set a new monthly budget, with a spending maximum for each category.
Use what you learned about your spending habits to create a new monthly budget. Set a spending goal for each category and work to stick to it throughout the year. Using tools like Budget Watch can help you create a personalized budget and track your expenses.
5. Cut unnecessary expenses.
Utilize Control Tower® to check out the recurring payments you have with different retailers and merchants. Take a critical look at what services you’re actually using; if you rarely use a streaming service that you’re paying $9.99/month for, cancel it.
6. Create a plan for getting rid of debt.
Put a plan in place to cut down your debt, including paying off debt with the highest interest rates first, refinancing, and consolidating student loans (if you’re out of school). Putting your plan in writing can help you stick to it. Remember to be realistic when setting your goals!
7. Any time you get a cash gift or paycheck, put 15% into savings.
While it may be tempting to splurge when you get a paycheck or birthday money from Grandma, putting a portion of any type of income into savings is a healthy practice to develop. Saving 15% or more of your income over time creates good habits for the future.
8. Strive for a $0 day.
Cook meals with what you have at home, refrain from buying that cute pair of shoes online, and take advantage of free entertainment such as going for a run or spending time at home with friends. You may find your $0 day so easy that you challenge yourself to a no-spend month.
9. Use your calendar to predict expenses.
As you start to fill your calendar with events and activities for the year, take note of the expenses that go along with them. If you’re planning to take a spring break trip or know you’re studying abroad next semester, start saving specifically for those anticipated expenses now. My Savings Plan® can help you create goals and track your progress.
10. Keep learning new financial concepts.
There’s always more to learn when it comes to best practices for managing your money, especially as you graduate and have new financial obligations, like paying off loans or negotiating your first salary. Sign up for the Beyond College webinar series to learn about topics like these and find many more professional-development and financial-health webinars.