New year, new opportunities to set yourself up for financial success! There’s no better time to take a good look at your moola, decide what you want to achieve in 2023 and work out a gameplan to reach your goals.
Here are five money habits to keep you on track.
1. Set specific goals
Before you can create a plan to reach your goals, you need to know what those goals actually are. What do you want to accomplish in 2023? Do you want to save for a down payment on a house? Pay off credit card debt? Build an emergency fund?
Whatever your goals may be, make sure they’re SMART: specific, measurable, achievable, relevant, and time bound.
2. Make a budget – and stick to it!
A budget is an amazing tool that helps you manage your money and achieve your financial goals. 22seven makes budgeting super easy. Link your accounts to track your income and expenses, then set limits on spending categories and let the app notify you when you’re approaching those limits. The more you know about how you’re spending, the better you can control it and take active steps to save.
3. Save consistently
Talking about saving… It sounds boring but it’s an essential part of building wealth and achieving your long-term goals. It’s also really hard! Many people find it tough to scrape together anything to put away at the end of the month.
The best way is to start with what you can, even if it’s just a tiny amount. As your earning power grows, you can gradually increase your contributions. Ultimately, you want to save at least 10% of your income each month. This might not be possible right away, but it's a good goal to aim for. Consider setting up an automatic transfer each month from your cheque account to your savings account. This way, you’ll save money before you manage to spend it.
4. Avoid unnecessary debt
Debt can be a useful tool for a big purchase like a house, but it can be a trap if you borrow money for the wrong reasons. Short term loans and credit cards often have eye-watering interest rates – you end up paying back far more than what you borrowed. Avoid unnecessary debt at all costs. Before you take out a loan or pay for something on your credit card, ask yourself: Is this something I really need? Can I afford to pay it back? Are there more affordable options available?
If you already have debt, work on paying it off as quickly as possible using a method that best suits your financial situation. Consider the avalanche or snowball method.
5. Be mindful of your spending
Reckless spending can derail your planning. Try to be mindful every time you spend. Use 22seven to keep track of your purchases and try to spot opportunities to spend less. For example, you can buy in-house brands instead of name brands when doing your grocery shopping, you can shop around for cheaper car insurance, find a better deal on mobile data… And always keep the opportunity cost of money in the back of your mind when you make a bigger purchase, like buying a new TV or splurging on a weekend away.
Keep at it and these five habits will soon become second nature. It will take effort and discipline, but the rewards will be well worth it. Cheers to financial success in 2023!