The New Year is the perfect time for a fresh start. You’re inspired to revamp your life in every single way — from the way that you organize your home to the food that’s filling up your fridge. If you really want to improve your life for the better, you should think about taking on some good banking habits.
What habits should you adopt this year?
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1. Save for Emergencies
Do you have an emergency fund? If you don’t have one already, that’s a mistake. You’re setting yourself up for a very stressful situation in the future. An emergency expense will fall right into your lap, and you might not have enough money to pay it off.
In this case, you’ll have to find a different method to cover the expense — and you’ll have to do it fast. You could use money from your checking account, but this could make it harder to cover your usual expenses for the rest of the month, like your utility bills. Or you could accidentally overdraw your checking account and collect overdraft fees.
Instead of using funds from your checking account, you could charge the expense to your credit card and pay down the balance later. Or you could go to a website like CreditFresh and see whether you’re eligible to apply for a line of credit loan there. With a line of credit loan, you could use borrowed funds to cover the emergency expense in a short amount of time. And, just like your credit card, you could follow a steady repayment cycle soon afterward.
A credit card or line of credit shouldn’t be the first solution you turn to in an emergency. Your savings account should be. So, go through your personal budget to see how much you can afford to set aside for emergencies. Get in the habit of transferring that amount into a savings account every month. Over time, you will build up an emergency fund that you can rely on when something goes terribly wrong.
2. Use Apps to Track Your Accounts
Start checking your financial accounts regularly. Don’t just assume that you have enough money sitting in your checking account to cover your budgetary needs. Don’t just spend blindly with your credit cards and then hope that you’re not going to accidentally max out a card. Check on these accounts to make sure that you’re being responsible with your spending and that you’re not setting yourself up for avoidable problems.
Another benefit of checking on your accounts regularly is that you can spot suspicious transactions that you don’t remember making. This means that you can detect whether you’ve become a victim of identity theft and fraud shortly after it happens. The earlier that you catch this crime, the better. You can contact your bank, your credit card company and the authorities about the fraud right away and hopefully get the problem resolved.
Apps make it easy to check on your financial accounts on a regular basis. So, download your bank’s mobile app and your credit card issuer’s app onto your smartphone as soon as possible.
3. Pay Those Bills On Time
Sometimes, bill payments slip your mind. You forget about their due dates and then panic when you get saddled with a late fee or a reminder from the provider to pay what you owe. This is a bad habit that you’ll want to break.
Other than late fees, these are some other problems that come with late bill payments:
- Providers might decide to close your account.
- Your consumer credit score can drop.
- With a lower credit score, you could lose out on future loan opportunities because lenders don’t see you as a reliable borrower.
So, you need to take your bill payments more seriously. You can use a bill payment app like Prism or TimelyBills to notify you of upcoming payments. Or you can automate your bill payments through your online bank account. By automating your bill payments, what you owe will be transferred from your checking account to the provider on the bill’s due date. As long as there is enough money sitting inside your checking account to cover the bill, the payment should go through. These are two simple ways that you can pay your bills on time from now on.
These habits can transform your financial life this year. So, get started on them!
