15 Smart Money Habits That Will Boost Your Finances This Year

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by Enoch Omololu

Updated

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In the new year, many people will make resolutions (regarding their personal finances, health, relationships, and more) to do new things or do some old things differently.

The statistics are not great on the percentage that will actually follow through with their new year resolutions (8% success rate according to Forbes).

Even if most new year resolutions fail, I’m optimistic you can make positive and incremental changes to your life this year 😉

Here are a few smart personal finance tips to improve your finances this year:

Set Financial Goals and Make a Budget

It may sound simple, but this is the starting point if you want financial success. Take a close look at your income and expenses. This gives you a picture of where your finances are at.

Set specific financial goals for the short, medium, and long term, and start working towards reaching those goals one after the other.

Track your spending using free apps like Mint, KOHO, YNAB, or just use a simple spreadsheet. Have a monthly budget – nothing complicated, keep it simple! Your budget is the key to meeting your goals.

If you fail to plan, you are planning to fail. – Benjamin Franklin

Automate Your Savings and Investing

After budgeting and documenting your savings/investing goals, it is time to make it happen automatically.

Set up your savings/investing accounts to automatically withdraw funds from your chequing account i.e. pre-authorized deposits. The chances of you following through with your savings/investing plans are significantly increased with this approach.

There are some great apps that automatically save/invest your spare change. Canadian residents can sign up for the Moka app ($5 bonus) and Wealthsimple Invest ($75 bonus). U.S. residents can sign up for the Acorns app.

Some options for high-interest savings: Open an EQ Bank Saving Account (Canada) to earn high interest on your savings.

If you are in the United States, take a look at what’s available through online banks such as Discover, Ally, and Synchrony.

Automate Your Bill Payments

As with your savings and investing, consider automating your bill payments. This will help you to pay your bills on time and avoid late-payment fees that can derail your savings efforts this year.

Paying your bills on time will also ensure you do not damage your credit score.

While ensuring you pay your bills on time, you can also get some significant money back when you use a FREE app like the Trim Financial Manager (U.S.).

Shop Around

Don’t get used to paying the “sticker price.” And, this is not only for high-priced purchases like a car.

Get used to doing comparison-shopping and look around for the best deals – including on groceries, car and home insurance, mortgage rates, etc.

Comparing prices and checking out reviews have never been easier to do, and you’ll be surprised how much you can save by deploying this simple strategy.

The cost savings will add to your bottom line by lowering your expenses. Make sure to earn cash back when you shop!

Pay Off High-Interest Debt

Paying just the minimum amount does not cut it with credit card debt – it’s like digging yourself into a bottomless hole.

With the high interest rates charged on credit card debt, you should be paying it off first before trying to save or invest.

When your credit card debt is defeated, you will have more funds to put towards boosting your finances.

Start a Side Gig

While you can try cutting down your expenses, you can only go so far.

Another strategy for increasing your savings and improving your finances is to increase your income by starting a side business and increasing your sources of income.

Get out of your comfort zone and engage your entrepreneurial abilities this year. There are many legit side gigs you can use to generate extra income.

Related reading:

Educate Yourself…Financially

Knowledge is power.

To boost your finances, you need to be financially literate and understand how money works. And, not just financial literature – read widely, and you will be the better for it.

Educating yourself may also include learning new skills that increase your earning power.

Some books you can add to your financial reading for the year are:

An investment in knowledge pays the best interest. – Benjamin Franklin.

Money Habits that will boost your Finances

Check Your Investments

Don’t just forget about your investments, check in once in a while.

If you are a passive index investor, you may need to re-balance your portfolio once or twice every year to ensure your asset allocations are still intact.

You should also be renewing your investments for fees. Minimizing the fees you are paying for the management of your investment can significantly increase your returns.

DIY investors can save money by buying ETFs on commission-free brokerages like Wealthsimple Trade and Questrade.

If you would invest on autopilot while saving on fees and maximizing your returns, consider using the services of a robo-advisor.

Wealthsimple is the most popular robo-advisors in Canada. You get a $75 cash bonus when you open an account using this link.

Ask For More

Yes, become an “Oliver Twist,” and ask for more!

To start, ask for more from yourself – you can probably do better in many facets of your life. Start small; like they say: “Rome was not built in a day.”

And, if you are already doing more, consider asking your boss for more (if you believe you deserve it). Negotiating your salary can be a smart move if you are an asset.

I came to understand the power of “asking” a few years ago when I got a $10,000 plus salary raise after I asked for a promotion at the conclusion of a 6 months anniversary performance review!

You can also “ask for more” by simply offering your skills to another company that better appreciates your talents and is willing to pay you more.

Review Your Bank Statements Regularly

In a world where fraudsters are just a click away, it’s important to check your bank statements for any odd activity.

At the same time, this will give you a good idea of where your money is going, and if you need to make adjustments.

As an aside, you may also note that useless magazine subscription that you need to call and cancel …again!

Work on Your Credit Score

Good credit history and a high credit score mean you can access credit at much lower interest rates.

Check your credit score routinely not only to see where you are at but also to detect any fraudulent activity, including identity theft.

You can now check your credit score and report for free in Canada.

Related: 4 Ways To Get Your Free Credit Score.

Talk About Money

Discuss finances with your spouse and children. It will be easier to achieve your financial aspirations when everyone in the family is on the same page with regard to financial goals, budgets, and plans.

Look for opportunities to talk about money and where you stand as a family. Talk about it at the dinner table, as you drive around town… whenever you have a chance.

When you are in a good place financially, the entire family benefits.

Stop Living to Impress Others

If you want to “keep up with the Joneses”, you had better be able to afford it and be willing to live with the additional stress it will bring.

While you should aim to do well for yourself and be a responsible member of society, you still want to live within your means.

We buy things we don’t need with money we don’t have to impress people we don’t like. – Dave Ramsey

Don’t Pinch Pennies While Losing $$$

I’m all for frugal living, but it’s gotta make sense.

While I do shop at the dollar store etc. for some items and ensure I get them as cheap as cheap can be, for some other items, I would rather buy expensive aka good quality aka safe aka peace of mind…

The question is – are you saving pennies today only to lose $$$ tomorrow or in the long run?

Don’t Wait to Win the Lottery

Yes, don’t hope and wait for a lottery win to solve all your financial troubles. The odds are against you in that department, and it will likely never happen.

Don’t bank on luck. Plan – plan – and do something about your plans. You can turn your finances around for the better if you set your heart on it.

A can-do attitude will do you a lot of good this New Year.

Related: Surefire Ways To Improve Your Money Management.

15 Smart Money Habits That Will Boost Your Finances This Year
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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

9 thoughts on “15 Smart Money Habits That Will Boost Your Finances This Year”

  1. Great tips Enoch! I especially like automation. By removing the need to manually invest each month, it’s much more likely you’ll do it. Also, some companies will give discounts for auto-paying bills. I know T-Mobile does, for example.

    • @Miguel. Yeah, I like automation as well especially if I can get some discounts at the same time. A good example that comes to mind is insurance (car, home, and life).

  2. Hello Enoch! This is a fantastic list here!

    I love automating stuff because it frees up soo much of your time, which can be spent doing better stuff. That includes learning, reading, and overall investing in yourself which yields ten-fold returns! As Warren Buffett says: the most important investment you can make is in yourself.

    I love your tip about DON’T PINCH PENNIES WHILE LOSING $$$
    I absolutely agree with quality over quantity… the saying goes something along these lines: only rich people can afford to buy cheap stuff (i.e. they have so much money, they can afford to keep spending it things that don`t last very long). haha…

    I also love how you mentioned credit score. So many peeps underestimate how much money they can save if they have a healthy credit score. It saves way more than just clipping coupons or getting sales/discounts at stores. Not to say these don’t help, but it’s important to focus on the big wins! 🙂

    Overall, awesome tips here! I love them all! Happy new year to you, Enoch. I hope you had an awesome Christmas!!

    • @finsavvy panda: First time I’m hearing about this saying – “…only rich people can afford to buy cheap stuff.” It does make sense! And, yes, you definitely save lots of money with a great credit score by qualifying for the best rates and deals possible – a big win for sure.

      I wish you a happy new year as well – cheers!

  3. @Steve. I have read good reviews about the book and looking forward to reading it soon as well. Cheers!

  4. Start investing sooner rather than later to take full advantage of compound interest. A $5 daily coffee amounts to about $35 a week, or $150 a month. “If you invested $150 a month and earned 10% annual return, you’d wind up with $948,611 in 40 years

  5. Great post!

    Another habit that is good is meal planning- I just bought some freezer bags today from the dollar store. I agree not buying certain things at the dollar store to focus on quality instead. For example, I avoid electronics from Dollarama.

    • @GYM: Good point! We do a lot of meal planning as well and buy in bulk when groceries are cheap or on sale. I agree with not buying electronics from Dollarama – when we shop there, its mostly for disposables or something to be used on a DIY project.

  6. Hi we’re really trying to get out of the debt and start to save and build wealth for our future and for our retirement planning and saving money.

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