Breaking the Chains: Building Healthy Habits with your Money

Recent studies have shown that our habits play a significant role in our financial stability. Building healthy habits with your money is essential for achieving both life and financial goals. In this blog, we'll explore several common bad money habits and provide practical tips, supported by MidWestOne Bank's expert advice, to help you replace them with healthier behaviors.

1. Embrace Budgeting and Spending Awareness

Bad Habit: If you're cruising through paychecks without a budget, it's time to pivot. A household budget serves as your financial compass, guiding you towards your goals.

Tip: Craft a personalized budget using free online templates or budgeting apps. Regularly tracking your spending sheds light on patterns, enabling you to trim expenses and bolster your savings.

2. Dodging Late Payment Charges

Bad Habit: Late payment charges eat into your finances, funds that could be better utilized for debt repayment or savings.

Tip: Safeguard your wallet by setting up automatic payments for your bills. This not only saves you money but also ensures punctual payments, preserving your credit score. You can also set calendar reminders for your due date or get in the habit of paying your bills on days when you are paid.

3. Socialize Wisely to Dodge Spending Influences

Bad Habit: Friends pushing for overspending can derail your financial plans.

Tip: Minimize social engagements with spendthrift companions. Opt for budget-friendly alternatives, like hosting a cost-effective gathering at home.

4. Plan Ahead for Significant Expenses

Bad Habit: Relying on credit cards for substantial expenses can lead to hefty interest charges.

Tip: Strategize and save for sizable expenses in advance. Set up automatic transfers to a savings account or leverage round-up apps to effortlessly boost your savings. BONUS: You can opt to pay your expense on your credit card and use the money you saved to pay off that card when your payment is due – this could help boost your credit!

5. Defy Social Media Splurges

Bad Habit: Not only do our smartphone apps create a breeding ground for impulsive spending, scrolling through social media may lure you into overspending due to fear of missing out.

Tip: Break free from the temptation to overspend beyond your means and stay vigilant about suggested purchases in apps. Consider removing tempting apps or using tools to restrict in-app purchases, ensuring your spending aligns with your budget. If you’re feeling like some extra savings – remove payment information from your device or remove your payments apps.

Additional Tips for Financial Empowerment:

6. Better Your Credit Score: To improve your credit score, focus on timely payment of bills, reducing credit card balances, and regularly checking your credit report for any errors that may need correction. A higher credit score opens doors to better opportunities for securing loans, mortgages, and credit cards, ultimately empowering individuals to achieve their financial goals with greater ease and affordability. Wondering about how credit scores work? Read our article on Understanding Credit Scores.

7. Build an Emergency Fund: Establish a financial safety net by creating an emergency fund to cover unexpected expenses.

8. Regular Financial Reflections: Schedule routine assessments of your financial goals and progress, adjusting your plan as needed.

9. Negotiate Monthly Bills: Don't shy away from negotiating bills, such as cable or insurance. Uncover potential opportunities for savings.

10. Conquer High-Interest Debt First: Prioritize paying off high-interest debts to save on interest payments and expedite your journey towards financial freedom.

Remember, breaking free from destructive financial habits is a journey, not a sprint. By incorporating these tips into your routine, you'll build a solid foundation for a brighter financial future. MidWestOne Bank is here to support you every step of the way.