Building Financial Wellness: 5 Smart Money Habits for the Everyday Mom or Dad

In the hustle of a 9 to 5 job, it's crucial for the average individual to cultivate smart money habits that pave the way for a secure financial future. If you have experienced anything like my husband and I have - we knew how to earn money we knew how to spend money but we didn't know how to save - these could be helpful for you.

Here are five key practices to consider:

1) Create a Budget: Start by tracking your income and expenditures. Establishing a realistic budget will help you prioritize essential expenses and identify areas for potential savings.

Track Monthly Expenses: Utilize budgeting apps or spreadsheets to monitor where your money goes each month. Categorize expenses such as groceries, utilities, and entertainment to gain a clear understanding of your spending patterns.

Set Realistic Goals: Establish achievable financial goals within your budget, whether it's saving for a vacation, paying off a credit card, or building an emergency fund. Realistic goals create a roadmap for your financial journey.

2) Emergency Fund: Build a financial safety net by setting aside a portion of your income into an emergency fund. This fund can cover unexpected expenses, providing peace of mind and preventing the reliance on credit cards.

Start Small, Save Regularly: Begin by setting aside a small percentage of your income into a separate savings account. Consistent contributions, even if modest, can accumulate over time, providing a financial safety net. Three to Six Months' Worth: Aim to build an emergency fund equivalent to three to six months' worth of living expenses. This reserve can cover unexpected medical expenses, car repairs, or temporary unemployment, offering financial stability during challenging times.

3) Tackle Consumer Debt: Develop a strategic plan to pay down high-interest consumer debt. Prioritize paying off credit cards and loans to reduce financial stress and save on interest payments over time.

Snowball Method: List your consumer debts from smallest to largest and focus on paying off the smallest debt first. As each debt is cleared, roll the payment into the next, creating a snowball effect that accelerates debt repayment. Negotiate Lower Interest Rates: Reach out to creditors to negotiate lower interest rates on credit cards or loans. A reduced interest rate can significantly decrease the total amount paid over time.

4) Automate Savings: Take advantage of technology to automate your savings. Set up automatic transfers to a savings account each payday, ensuring consistent contributions towards your financial goals.

Snowball Method: List your consumer debts from smallest to largest and focus on paying off the smallest debt first. As each debt is cleared, roll the payment into the next, creating a snowball effect that accelerates debt repayment. Negotiate Lower Interest Rates: Reach out to creditors to negotiate lower interest rates on credit cards or loans. A reduced interest rate can significantly decrease the total amount paid over time.

5) Invest Wisely: Explore low-cost investment options such as retirement accounts and index funds. Investing a portion of your income can help your money grow over time, providing a valuable asset for your future.

By incorporating these smart money habits into your daily routine, you can lay the foundation for financial success and work towards a more secure and comfortable future.

Diversify Your Investments: Spread your investments across different asset classes, such as stocks, bonds, and real estate. Diversification helps manage risk and enhances the potential for long-term returns.

Take Advantage of Employer Matching: If your employer offers a retirement savings plan with matching contributions, contribute enough to maximize the match. It's essentially free money that boosts your overall investment portfolio.

One saving tool I have been using for years is the app Acorns

Acorns offers different subscription tiers for your life’s financial needs.

My FAV feature - Acorns automatically invests my spare change as little as $5 any time or on a recurring basis into a portfolio of ETFs. By the end of each year I save $1,000 to $1,200 that I use for holiday spending!

Link to trying out Acorns and they will invest $5 back into your account