Many financial targets feel distant for the average person. Purchasing a home or car, retiring early or even affording a vacation can seem like unattainable aims. Yet reaching any objective, however ambitious, often begins with modest changes. Below are 10 practical ways to improve your money habits now to help you get closer to your goals.
We’ll cover habits such as keeping a budget, using cards with perks and comparison shopping for recurring costs like insurance.
10 of the Best Ways to Improve Your Money Habits
You don’t need a massive raise or a lucky windfall to begin improving your financial outlook. These money-smart habits can put you on the right path.
1. Open a High-Yield Savings Account
This tip is a Savinly favorite. Putting money aside is smart, but if it’s sitting in a regular checking or savings account, it likely earns very little interest. A high-yield savings account can offer an APY roughly between 3.00% and 5.00%. For instance, if you place $100 in an account with a higher APY and leave it untouched for a year, you’d still earn a few dollars. While we encourage regularly adding to your savings, this shows you can grow your funds with minimal effort.
To simplify your search, look for curated lists of top high-yield savings accounts that note minimum deposits, fees and other details.
2. Create a Monthly Budget You’ll Actually Follow
Making a budget is one thing; sticking to it is another. Life has surprises — a planned car maintenance expense can turn into a tire replacement, or a vacation fund can be blown when flights change. The trick is to design a budget that’s realistic for your lifestyle and objectives. You don’t need to mimic a friend saving for a wedding if that’s not your situation.
Most budgets include fixed costs (phone, loan payments), variable spending (groceries, fuel) and categories for fun and savings. It’s hard to meet money goals if you’re not aware of where your cash goes. After you set your plan, commit to it as best you can.
3. Use a Budgeting App to Monitor Your Spending
There’s an app for almost everything — let budgeting apps bring convenience to your finances too. Some are free while others charge a fee, but the automation and insights they provide can make the cost worthwhile. These tools simplify tracking and give you a clearer picture of your habits.
One favorite is Cleo, a chatbot-style tool that helps monitor spending and curb poor money behaviors before they escalate. It can round up purchases to the nearest dollar and stash the difference or even “fine” you for overspending at particular stores.
There are comprehensive roundups of top budgeting apps so you can select one that fits your needs. For example, Monarch lets you review spending by merchant or by category.
4. Automate Transfers to Savings
You can set up automatic transfers from checking to savings, or use features available in many budgeting apps. This is one of the simplest ways to develop better money habits. Decide how much of each paycheck you want to save, schedule the transfers, and let it happen without having to remember. When you get a raise, you can always increase the amount you save.
5. Comparison Shop for Recurring Bills Like Insurance and Internet
If you’ve never shopped around for car insurance, you might be paying more than necessary. Even if you have checked rates in the past, you could still be overspending. Try reviewing options at least once a year, near renewal time, to confirm you’re getting a competitive price. The same goes for services like internet and mobile plans.
Researching can be time-consuming, but some tools compile top auto insurance options in one spot so you don’t have to visit many sites. Drivers who compare rates often save several hundred dollars annually.
6. Cook at Home More to Lower Food Spending
This saves money only if you plan carefully. Buying a bunch of ingredients for a one-off recipe you won’t reuse, then tossing leftovers because you live alone, defeats the purpose. You need practical meal planning. Don’t tell yourself you’ll eat the same dish every day if that’s unlikely. Choose recipes that use ingredients you already have or that you can use again before they spoil. There are plenty of online resources with budget-friendly meal ideas.
Invest in freezer-safe containers to store leftovers and eat them later. If you do order food, consider picking it up to avoid delivery fees.
7. Pay Yourself First From Every Paycheck
This popular personal finance approach urges you to prioritize savings over discretionary spending. “Pay yourself” by moving money into savings before dividing the rest among expenses. Automation makes this easy — once it’s set, those funds are out of sight and less tempting to spend.
8. Audit and Cancel Unused Subscriptions
The proliferation of subscription services makes tracking spending harder. Small monthly fees can add up to $50 or more wasted each month as you accumulate unused memberships.
Tools like Rocket Money can identify forgotten subscriptions and overpriced bills, helping users recover wasted money. On average, members save hundreds of dollars per year. Such services can help cancel unwanted subscriptions and even negotiate lower monthly rates for internet, phone and other bills — often trimming roughly 20% from those charges. Just create an account, link your bank, and let the app scan for opportunities.
9. Use a Cash Back or Rewards Debit/Credit Card
If most of your purchases are in cash or with cards that offer no perks, you’re missing potential benefits. Cash back and rewards cards return a portion of your spending — cash, sign-up bonuses, travel miles and more.
Cash-back cards commonly provide 1%-5% back, sometimes on all purchases but more frequently in rotating or specific categories like dining or gas. There are curated lists of top cash-back cards to consider.
Rewards cards operate similarly but may provide miles or points for travel rather than direct cash. Watch for annual fees (usually higher on travel-oriented cards) and interest charges. To truly benefit, pay the balance in full each month to avoid interest.
10. Set Manageable Short-Term Money Goals
Ambition is great, but avoid setting extreme targets that leave you discouraged. Make small, realistic adjustments you can sustain. If you currently eat out three times a week, try cutting back to once a week for a month rather than eliminating dining out forever. Even setting aside $10 from each paycheck is progress. Gradually increasing your better habits will likely be more effective than trying to overhaul your lifestyle overnight — unless you’re ready for that kind of change.
