5 Financial Habits of People who Manage Their Money Wisely

The 5 Habits

Live Below Your Means

Successful people often live below their means. This doesn't mean being cheap but rather being frugal and intentional with spending. This type of expense management carefully helps you avoid debt and grow savings over time.

• Spend less than what you earn with a focus on distinguishing needs from wants. This habit will give you financial flexibility and peace of mind.
• Buy quality used items when possible. Good products last longer than cheap ones do—which saves money over time.
• Avoid maxing out credit cards. If you're in the market for a good credit card, click here to take advantage of some cash back and low-rate options.
• When spending money on something special, make sure it's planned, thoughtful, and priced within your means.

Stick to a Budget

Knowledge is power, especially when it comes to your finances. By tracking spending, you can identify areas where you may be overspending and adjust.

• Keep track of where your money is going by using a spreadsheet, notebook, or budgeting app. A good spending analysis tool, such as the financial management tools in Digital Banking, can help you categorize your expenses automatically.
• Use the 50-30-20 rule as a foundation: allocate half of your earnings to needs, 30% to wants, and the balance to savings and debt repayment.
• Eliminate random purchases. Before buying, weigh whether it aligns with your financial goals. Make sure all your expenditures are consistent with what you want in the long run.

Invest Wisely

Keeping all your money in a savings account isn't always the smartest move. While it's important to have an emergency fund, consider investing some of your money for long-term growth.

While there's no guaranteed path to wealth, consistent, long-term investing with a financial advisor is a proven strategy for building financial security over time. All investments come with some level of risk. Stock markets fluctuate, interest rates impact bond values, and economic conditions affect various asset classes differently. Understanding and managing these risks are key to successful investing.

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Pay Down Debt

If you're facing some debt issues, it's crucial to develop a strategic plan to address it. Begin by reviewing what you owe—credit cards, mortgages, car loans, student loans, and more. Understanding the types and amounts of debt you have is essential for creating a solid debt repayment strategy.

Prioritize your debts by focusing on those with the highest interest rates first. This approach can save you money in the long run by reducing the overall interest you pay. As you make progress, continue to allocate freed-up funds to the next highest-interest debt.

Continuously Educate Yourself

Financial literacy is a lifelong journey. Make it a habit to learn about personal finance through books, podcasts, blogs, or workshops. Read our latest news and blog on financial topics and tips for managing your money.

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Putting It into Practice

Adopting new habits is one thing; maintaining them is another. Here are strategies to help you stay consistent with your smart money habits.

Set reminders and alerts: Use reminders to keep track of bill payments, savings contributions, and budget reviews. Our mobile app offers customizable alerts to help you stay on top of your finances.

Sign up for eStatements: to see all your account transaction activity and history, balances, and account details. This eliminates the need to wait for paper statements to arrive in the mail, which also protects against mail fraud and allows you to stay on top of your finances more frequently.

Use tools like calculators for loans, mortgages, and retirement savings to see how small changes can impact your long-term financial goals.

Automate where possible: Set up monthly transfers from your checking account to your savings account. By "paying yourself first," you ensure that saving becomes a priority before you spend on anything else. This budgeting habit can help you stay on track.

Check your report: Regularly monitor your credit report for inaccuracies. Incorrect information can drag your score down, and a low score can affect your career, education, and the rates that lenders offer you.

Review your progress regularly: Break down larger financial goals into smaller, achievable steps. As you reach certain steps, you set new goals to keep progressing. Regular reviews also help you stay informed about key financial trends, such as economic indicators, interest rates, and market fluctuations.