Creating Sound Financial Habits Pays Off

Many people know nothing at all about managing their personal finances. This results in people living paycheck to paycheck, having problems making ends meet and living in unsatisfying and even impoverished circumstances. In this article, we will discuss some good financial habits you can develop to help you make the most of the money you have. Read on to learn more.

Pay close attention to your pay stub. Be sure you are paid for every hour you work and provided vacation leave and sick leave to which you are entitled. All of these aspects of your paycheck add up to money, and you do not want to be robbed. Make certain you are claiming the right number of deductions so that you are paying the correct amount to federal, state and local governments. There is little point in having excess amounts taken from your check for the government to earn interest on. Put that money in your own savings account and earn interest on it yourself.

Watch your bank statements carefully and keep track of every penny you spend. When you write a check or use your debit card, write it down in your check ledger. Account for your debits immediately or at least at the end of every day so that you are always aware of the running balance in your checking account. It is too easy to forget a minor expenditure, but an overdraft of even a penny could easily cost your $30 or $40 or more if you do not notice the fees immediately.

Do not be a spendthrift. If you get a bonus at work, a refund on your taxes or some other windfall, use it wisely. Give yourself a percentage to celebrate, but be sure you also take care of any debts or necessities you have been putting off taking care of. Put at least 10% in your savings account. Be sure to save at least 10% of every paycheck so that you will have some money on hand in case of emergency. This will help you prevent having to use credit cards or resort to costly options such as payday loans to take care of emergency needs.

Avoid paying a third party to manage your money. Learn how to manage your money yourself. It is not rocket science. Keep close track of your checking account and save 10% of your earnings is a basic formula for wise money management. When you get into investments, talk with your banker for good advice. Do a little studying on your own and make careful deliberate choices.

Choose to bank at a credit union if you have that option. Credit unions are established for the purpose of helping people be financially responsible. Banks are established for the purpose of making money. When you entrust your money to a bank, you can be sure they will do everything they can to charge you fees and make your money their own. This is especially true of banks you find established in discount stores and big box stores.

Create a budget and stick to it. Be realistic about how much money you actually have and how much you need to live comfortably. Make smart, thrifty choices such as eating at home instead of eating out, choosing to borrow books and DVDs from your local library rather than purchasing or renting entertainment materials, purchasing gently used furnishings, clothing and household goods rather than financing new goods and so on. Pay your bills on time to avoid fees and be thrifty in your use of utilities.

By being alert and aware and exercising self restraint in all your dealings, you can learn to live well with the money you have. Follow the tips presented here to make smart, responsible financial choices.