Some people have the misconception that getting better with money is a complicated process. They think that any meaningful improvement is going to take hours or longer. That’s a harmful belief, because it often leads to not making any positive changes.
It’s faster and easier than you might think to improve at personal finance. In fact, you can make several impactful changes in five minutes or less.
1. Bump up your retirement contributions
Ideally, you’re already saving money for retirement. If not, see if your employer offers a 401(k) plan you can start contributing to directly out of your paycheck. Another option, that anyone can open, is an individual retirement account (IRA).
If you save for retirement every month, see if you can increase how much you save. A good way to do this is to increase your contributions by 1% of your income every year.
Let’s say you make $5,000 per month, and you currently save 10% ($500) for retirement. For 2024, try raising that to 11% ($550). If that works, go for 12% ($600) in 2025, and so on. Make sure you also recalculate the dollar amount you should be saving each time you get a raise.
2. Automate your savings
Saving money is one of those important, simple financial habits that can be a lot more difficult than you’d think. You go over the numbers and figure you’ll be able to save a certain amount at the end of the month. But when the end of the month rolls around, you realize you have nothing left to save.
Most of us have been in this situation. When you make saving the last item on the list, it’s easy to spend all your money.
The solution: Move saving to the top of the list and make it automatic. Set up an automatic transfer from your checking account to your savings account after you get your paycheck. When you automate your savings, you don’t have to worry about forgetting to do it or spending all your money first.
3. Cancel unneeded subscription services
Subscription services are everywhere, and they can be worth it, if you use them often enough. But if you have too many, or if you’re paying for subscriptions you don’t use, that’s when they become a financial problem.
This is all too common. In a 2022 survey by C+R Research, 42% of respondents said they stopped using a subscription but forgot they were still paying for the service.
Check all the subscriptions you’re currently paying for. If there are any you don’t use, cancel them right away. Also, make sure you’re getting your money’s worth from the subscriptions you use. If there’s anything you’re on the fence about, consider canceling for now and seeing if you miss it or not.
4. Review your recent spending to see where your money’s going
People often underestimate how much they spend. If you feel as if you never have as much money as you’d expect, there’s a good chance you’re spending more than you realize.
The only way to know for sure is to review your spending. Look over your most recent credit card statement to see exactly where you’re spending money and how much. If you’re spending more than you expected anywhere, make it a point to cut back in that expense category. Another way to better monitor your spending is by using a budgeting app.
5. Open a rewards credit card
Rewards credit cards are an easy way to get value back on the money you spend. Some of these cards earn a flat rate of 1.5% to 2% back on purchases. Others earn a base rate of 1%, but also have bonus categories where they earn anywhere from 3% to 6% back.
To demonstrate how much value you can get from a rewards card, let’s say you have $2,500 in monthly credit card spending. You open a card that earns 2% back on purchases. That will earn you $50 in cash back per month, which adds up to $600 per year.
