May 28, 2025
When it comes to your finances, developing good money habits can make all the difference. Building a strong financial future takes time, and knowing some day-to-day steps to better manage your money could help ensure that you reach your long-term goals.
If you’re not sure where to start, don’t worry. We’ve got nine good financial habits you can start with to help strengthen your financial well-being in 2024 and beyond.
The first step toward financial health is exactly how much money you have and where you spend it. Start with your take-home pay each month. Then, figure out how much you spend on basic living expenses, such as rent or mortgage, groceries, transportation, childcare, and insurance.
Next, add up what you spend on extras. These might include the daily coffees you buy on your way to work, restaurant takeout, or subscriptions to services you do not use. Track these purchases for a few months to get an idea of where you could cut back on your spending.
Finally, look at what you pay each month to cover debt such as credit cards and auto or student loans.
Pay attention to the interest rates you pay and the minimum monthly payments required. Note the balances, the payments you make, and when the loans will be paid off. A healthy micro habit might be to review and update this information once or twice a year in order to keep your budget current.
Once you have a clear picture of your finances, it is easier to set up a budget. By tracking your spending and income, you may find adjustments to make that will save you money.
There are many tools and methods that can help create a budget. For example, the 50-30-20 rule could guide your needs, wants, and savings. This budget is popular because it helps people balance long-term savings and necessary expenses with spending for fun and enjoyment.
Whatever tool you use to budget, the power of this financial habit comes from regularly tracking your spending. It may make the difference between just staying afloat and truly getting ahead.
An unexpected expense might quickly knock your finances off track. Can you pay only part of a major car repair or medical expense? If so, you may end up using a high-interest credit card or cutting back on long-term savings to cover the cost.
To avoid this, some experts suggest setting aside 3-6 months of living expenses in an emergency fund. If that target is too high to begin with, start with a smaller amount and make a commitment to add to it regularly.
No matter the amount, it is important to include an emergency fund in your budget. Add what you can each month. By doing so, you position yourself well if a surprise expense pops up.
It's smart to have goals like saving for retirement, a vacation, or a down payment on a home. But day-to-day living could prevent you from reaching those goals.
An effective way to make steady savings a habit is to put that money out of sight. You can direct a set amount from your paycheck to go into your savings account automatically. Because that money never hits your checking account, you might be less tempted to use it for impulse purchases.
Debt can be a useful tool, but you want to avoid having it linger. The longer you carry debt, the more you may pay in interest, and that is money you could be saving.
Try to get in the habit of paying more than the minimum amount on your debt whenever possible. Even a small increase may allow you to pay off debt sooner—helping you save money on interest.
Also, think about paying off higher-interest debt first. It may be helpful to consolidate this debt into a personal loan with a lower interest rate. For example, a personal loan from Discover® allows you to combine multiple higher-rate balances into a single loan with a fixed monthly payment. And you can choose from multiple repayment options to fit your budget—36, 48, 60, 72, or 84 months.
Late fees can add up. To help avoid them, set up a regular schedule for paying bills. You may also want to see if your lenders offer an automated bill-pay service. This way you won’t forget a payment. Just remember to include any of these payments in your budget planning.
If you prefer making manual payments, set regular calendar entries for your bills. You might decide to pay all your bills once or twice a month. Be sure to allow enough days before your due dates for the funds to reach your accounts.
Paying bills on timeisn't just about preventing late fees. This financial habit could positively impact your credit score, which could improve your overall credit health. For example, a stronger credit score might demonstrate your creditworthiness when you apply for other loans. It might also lower your interest rate if you get a loan, which might save you money in interest down the road.
Your insurance needs are likely to change over time. That is why it's a good habit to review your insurance coverage at least once a year to confirm you have the right coverage for your situation.
You may have auto, life, and home (either homeowners or rental) insurance. If your situation changes—whether you move, get married, or start a family—you should check that you have the right coverage. Remember to review your health insurance coverage at the same time.
This money habit might be challenging. It’s not always easy to live on less than you earn. But if you build a frugal mindset and curb spending early, you may enjoy greater financial security over the long term.
If your income grows, you might still make small lifestyle changes to keep your spending in check. For example, review whether you’ve increased your discretionary spending on restaurant meals and takeout, subscription services, clothing, and gifts. Ask yourself whether these are “wants” or “needs.”
You might find it easy to live without some of these items. And your reward may be savings that grow faster, bringing you closer to your financial goals.
The sooner you commit to saving for retirement, the better. This may be true even if retirement seems far away.
It is important to build retirement savings early so you might benefit from compound interest, which allows you to earn interest on the interest you collect over time.
Does your job offer a 401(k) plan? Sign up (if you haven’t already) to take advantage of this automatic savings. When you maximize your employer-matched contributions, you might get every dollar your employer is willing to give.
If you do not have access to a 401(k), you may consider a traditional or Roth IRA. These accounts allows you to save for retirement and they offer important tax advantages. Consult with a professional to figure out what’s right for you.
Good money habits may be hard to start. Once you build one good habit, it’s easier to build the next one. You start to see the results, and your efforts might gain momentum. By adopting these 10 healthy money habits now, you may soon be on the road to a healthy financial future.
If you’re not sure where to begin, and you think your debt may be holding you back, we have tips for how you might pay it off quickly.
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The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover, a division of Capital One, N.A., (Discover) or its affiliates.
