(WXYZ) — If getting your finances in order is one of your new year’s resolutions, start small. Here are six micro habits for financial well-being so you don’t waste your money.
After so many people experienced financial setbacks in 2020, this year may be a rebuilding year for a lot of people. But there are some small steps you can take every single day to reach your goals.
Maybe you racked up more debt, cut back on expenses, or exhausted your emergency savings last year.
“Fortunately, I haven’t had to dip into savings, but it is kind of hard to create savings right now,” Jamie Meaney – a 25-year-old teacher.
Many people can relate -- especially fellow millennials Stephanie and Jennifer Bloom.
“I think during this pandemic we’ve all seen situations, everything just changes on a dime,” said Jennifer.
The sisters are navigating some big life changes – marriage, moving into a first house, having children.
But the siblings are now working in the family business – Bloom Advisors in Farmington Hills– writing a weekly blog about Millennials and Money.
Their advice for the new year?
Adopt six micro habits for financial well-being.
6 MICRO HABITS FOR FINANCIAL WELL-BEING
1. Educate Yourself Using 30/60 Rule
This means consuming 30 minutes a week of financial education and 60 seconds a day understanding your financial situation,” said Stephanie.
The idea is to spend 30 minutes a week reading a book about personal finance or listening to a podcast on the topic.
Then spend 60 seconds each day evaluating where you stand financially.
“Open up the apps, the websites to your credit cards, make sure you’re not late on any payments,” Stephanie explained.
2. Get More Sleep
It may sound odd, but getting more shut-eye is good for you financially. Really!
“Research shows 30 minutes more a night allows us to make less impulsive decisions,” said Jennifer.
Impulse buys can be very costly. So, it can literally pay for you to count more sheep.
3. Hit the Pause Button Before Making Big Purchases
Pulling the trigger on a big ticket item should take some time. Basically, if you feel finanicially trigger happy -- so to speak -- hit the pause button.
“Create a threshold for yourself. Maybe it’s 100-dollars, maybe it’s 200, whatever feels right to you. And before you buy that item, hit the pause button and sleep on it,” said Stephanie.
Consult with your family or friends about the purchase, and do your homework to make sure the item is the right one for what you need.
If you forget about it, you probably didn’t need it after all.
4. Quality over Quantity
Yes, we love our wholesale warehouse stores. But sometimes you don’t need to buy a whole crate of an item.
Also, spending more for quality items can pay off in the long run.
Think about “Investing in things that are going to last," said Stephanie. "I think we’re all kind of guilty of this -- we see something, and it’s inexpensive. And it can do the job, right? But does it really do the job? And does it last?”
5. Learn To Say No
In this FOMO culture, “Fear of Missing Out” is a real concern for some people. But you can say ‘No’ if an expense is going to derail your financial goals.
Jennifer listed examples, “Some of those special events -- weddings, birthdays, eating out, entertainment – especially when the world comes back.”
6. Automate Savings & Start Investing
"If you don’t see the money in your bank account, it’s really hard to spend,” explained Jennifer.
The Blooms suggest you set up an automatic payment from your payroll provider to your 401k account and into your savings account.
And use spare-change savings tools – like the “acorns” app where you round up to the nearest dollar on all purchases.
“It’s kind of cool how much you can safe a month the more you use your credit card,” Stephanie said.
Your bank may also have a spare-change savings program – like Bank of America’s Keep The Change savings program. It’s worth checking with your bank.
The Blooms recommend you work up to saving 10% of your income.
And if you don’t have an emergency savings fund – start one.
Work towards having at least a three-month cushion (6 months is ideal).
Sure, it may sound like an impossible goal, but setting small “micro habits” is how you get started.