Personal Finance

How to create better financial habits — no matter what’s going on in the world

This has been a year of unprecedented changes. Postponed vacations, remote work, and virtual happy hours are now the new norm. These unique times are prompting people to rethink and reinvent their lives, their spending and savings habits being no exception.

What if I’m in my 40s and don’t have a retirement fund?

Recent savings trends revealed in our new CIT survey are worth noting. Over half of consumers are saving more, in particular Generation Z and millennials, who reported an uptick in saving between the months of March and June.

Overall, three-quarters of consumers say they are somewhat likely or very likely to stash away more cash in the future than they usually do each month.

These results are encouraging. But no matter what you’re doing, there’s always room to improve. Consider these useful tips to refocus your savings strategy and reinforce your objectives.

Re-evaluate your goals. Think about how your lifestyle has changed since you’ve been social distancing and spending more time at home and focus on what you’d like to accomplish. Do you want to invest in a new remote workspace? Have a home improvement project to save for? Or do your kids need new computers for remote learning? Set a goal that aligns with your needs, say, $100 a month for a new savings fund, and commit. You can always take on an additional goal or increase the dollar amount once you’ve mastered the basics.

Adopt new healthy habits. Our survey reveals that 4 in 10 of consumers are making fewer impulse purchases. That’s certainly a great start. To be even more deliberate about managing expenses, layer in a handful of small but effective changes. Set spending limits on your debit or credit cards, meal prep at least one day a week, or cancel a subscription service that you don’t use frequently. Soon enough these choices will become innate habits that require little thought and no sacrifice.

Automate your savings. To save more effectively, automate your savings. Establishing a repeatable process that doesn’t require a large time commitment will make the process more manageable. The good news is 49% of consumers are somewhat or very likely to automate contributions to a savings account in the future according to our survey. Join them! Make your $100 a month goal effortless by setting up an automatic transfer. You likely won’t miss it or notice it’s gone.

Choose an account that simplifies saving. Mobile and online banking has surged in the last few months and banks are investing in account features that maximize your convenience. Seamless money transfer tools, 24-7 account access, and robust security measures can make the task of setting aside money more straightforward. Choose an account that is digitally convenient and allows you to save more effectively.

Each of us can create healthier and more rewarding financial habits that help us reach important goals. Whether you’re looking to invest in your home, save for an upcoming purchase or simply prepare more for the future, it’s important to be realistic about how to achieve your financial goals through tangible, measurable milestones.

Ravi Kumar is head of CIT’s direct bank.


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