{"id":1595,"date":"2023-01-29T21:20:54","date_gmt":"2023-01-29T21:20:54","guid":{"rendered":"https:\/\/www.sprucemoney.com\/resource-center\/?p=1595"},"modified":"2025-09-02T15:55:58","modified_gmt":"2025-09-02T15:55:58","slug":"better-money-habits","status":"publish","type":"post","link":"https:\/\/www.sprucemoney.com\/resource-center\/spending\/better-money-habits\/","title":{"rendered":"Better money habits for smart spending"},"content":{"rendered":"\n

Just about everyone wants to be better with money\u2014whether that\u2019s never again missing a payment, \u00a0simply saving for the future, or whatever your goal is. But building better money habits can seem like a massive effort, and it seems everyone has a different idea of what smart spending looks like.\u00a0<\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

The good news: Better money habits start with small steps. You can implement these steps quickly and painlessly, making the process a lot less intimidating and keeping you motivated along the way. And before you know it, your small steps are leading to big moves that can make a big difference for your financial as well as your mental health.<\/p>\n\n\n\n

Here are some of the big moves, and small steps, you can take to strengthen your personal finances.  <\/p>\n\n\n\n

<\/a>Big move: Create a budget for smart spending<\/strong><\/h2>\n\n\n\n

Creating a budget<\/a> is essential to building better money habits. It allows you to learn where your money is going, gives every dollar a purpose, and ensures you have enough money to pay for expenses and save for the future. Plus, by creating a budget<\/a>, it’s easier to uncover where you may have some bad money habits (like impulse purchases).   <\/p>\n\n\n\n

<\/a>Small step: Choose how you\u2019ll budget<\/h3>\n\n\n\n

There are plenty of ways to create your budget: a spreadsheet, an app, or good, old-fashioned pen and paper. Choose the method that works best for you based on your lifestyle, preferences, and anyone you\u2019ll be budgeting with. It might take a little research, but you can find a high- or low-tech solution that makes budgeting doable.<\/p>\n\n\n\n

<\/a>Small step: Assess current spending habits<\/h3>\n\n\n\n

Next, take stock of your current spending habits. Know how much your minimum payments are for any loans, the cost of rent<\/a> and utilities, and how much you currently put into savings every month. Using the last few months of spending as a guide, write out where your money is currently going and note when payments are due to avoid paying late fees. This process gives important information you can use as you move ahead.<\/p>\n\n\n\n

<\/a>Small step: Set realistic goals<\/h3>\n\n\n\n

Maybe this process helps you see that you\u2019re spending a shocking amount on fast food, or you discover your credit card payments are taking over your life. Either way, you\u2019ll want to set goals that your budget will reflect.<\/p>\n\n\n\n

Cut back on overspending, but budget some money for things you enjoy, like hobbies, lunch with friends, or a travel fund. That makes your budget realistic, which can help you stick to it. Plus, it lets you balance living your life while tending to your money goals.<\/p>\n\n\n\n

And don\u2019t be afraid to reassess your budget after each month to make sure it\u2019s an accurate reflection of your lifestyle, spending, and financial health goals for the future.<\/p>\n\n\n\n

<\/a>Big move: Pay off debt<\/strong><\/h2>\n\n\n\n

Building better money habits is more challenging when you have a lot of debt and big monthly payments. Though it may feel like debt is an inevitable part of life, paying down debt is not only possible, but immensely rewarding. Break repayment into manageable steps and work steadily toward becoming debt-free.<\/p>\n\n\n\n

<\/a>Small step: Pay off your smallest debt<\/h3>\n\n\n\n

While paying off debt can seem overwhelming, start small: One way is called the \u201cdebt snowball method\u201d where you figure out the smallest sum you owe and throw everything extra at it, paying it down as quickly as possible while making the minimum payments on your other debts. Just paying off one debt proves that it\u2019s possible to make real progress. <\/p>\n\n\n\n

This approach allows you to gain momentum as you pay off each debt, smallest to largest. When you pay off each debt, take the moment to celebrate your win! Taking the time to acknowledge how far you\u2019ve come can help you stay motivated.<\/p>\n\n\n\n

You may be wondering where interest rates fall into consideration here. With the snowball method, you still pay down the smallest sum, regardless of interest rates. <\/p>\n\n\n\n

Other strategies include the debt avalanche (prioritizes the highest interest rate) and debt consolidation loan (bundles all debt into one account). A word of caution: A debt consolidation loan may seem like a way to simplify things and may save some interest in some cases; it can also push debt down the road rather than actually paying it off.<\/p>\n\n\n\n

<\/a>Small step: Get a side hustle<\/h3>\n\n\n\n

Consider getting a side hustle, or part-time job, and using all your extra earnings to pay off debt. A side hustle doesn\u2019t have to be time-consuming \u2014 there are plenty of ways to earn cash that you can do on weekends and evenings, including monetizing a hobby or skill you already have. Making even an extra hundred dollars a week allows you to make progress toward paying off debt and building better money habits. <\/p>\n\n\n\n

<\/a>Small step: Avoid running up new debt<\/h3>\n\n\n\n

If you\u2019re trying to get out of debt, avoid going further into debt whenever possible. Continuing to pay for things with a credit card and taking out more loans (or taking out a larger loan than needed!) will hinder your progress. It could also demotivate you in your journey toward making better money habits. Once you start earning extra income and paying off your credit card debt or other debt, keep the momentum and avoid digging yourself further into a hole.<\/p>\n\n\n\n

If money\u2019s tight, Spruce may be able to help keep you on track in a couple ways. For one, with Spruce you can get paid up to two days early<\/a>