Good financial habits to develop
Based on a TD Newsroom article published May 22, 2020
Daily routines and busy lifestyles make it easy to get swept up in what needs your attention now. While you may have good saving and spending habits, taking time to review your finances and to plan for the future is important to do. That's why it's good to look at some steps you can take to maintain or develop positive financial habits right now.
Here are four ideas for bringing good financial habits into your life :
1. Make a budget or revisit your existing one
Budgeting is a good habit to develop to keep yourself financially ready. It lets you see where and how you're spending and saving and can help you to prepare for unexpected situations. Keeping an up-to-date budget can help you prioritize expenses and identify ways to reduce your spending – which can be especially helpful to know if your circumstances suddenly change. Although you may find your fixed expenses remain fairly constant, you should review other expenses to see if you can make changes or any reductions. Revisiting your budget often can also help you identify if you have more opportunities to save and/or to redirect your spending.
2. Track your spending
Paying attention to how you're spending can be just as helpful as following a budget. Using an online app like TD MySpend which tracks spending made through TD deposit and credit card accounts can help you see where you're spending on "needs", like groceries and home expenses, and "wants", like entertainment and special treats. While your spending may change based on seasonality and circumstances outside of your control, it can be helpful to use a tracking tool like TD MySpend to see exactly where your money is going so you can confirm that you're spending on the things that matter most to you.
3. Set long-term financial goals
While it's important to know what you're spending on a daily or weekly basis, don't forget to look at your future and how you're saving for your long-term financial goals. While changing circumstances can make future goals feel more difficult to focus on, it's a good idea to stay in touch with your financial advisor to help you continue working towards them, while still managing your more immediate needs.
4. Build an emergency fund
If you're able to start – or continue – contributing to an emergency fund, it's worth considering. Having a savings amount to set aside worked into your budget can help you build an emergency fund that you can turn to in case unexpected expenses should arise. Your contributions don't need to be large - even small contributions add up over time. Using an automatic savings tools like our Simply Save Program can help you set aside a little bit of cash in your savings account every time you use your credit card or debit card. In the case of Simply Save, you can start as low as $0.50 up to a maximum of $5.00. Alternatively, you can proactively set a pre-authorized transfer from your chequing to your savings account on a schedule that works for you and your income flow.
This content discusses current topics of interest in a general and informational manner only and may not be appropriate in all circumstances. Please ensure that you seek advice personalized for your situation from the appropriate professional, consultant or subject matter expert on the topic of interest to you.
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