Smart Financial Habits to Boost Your Wealth
As a young professional, managing your finances effectively is crucial to achieving long-term financial stability. Michela Allocca, a 29-year-old personal finance consultant and author of “Break Your Budget,” shares five essential financial habits she swears by to keep her finances on track.
Return Unwanted Items
Allocca emphasizes the importance of returning items that don’t fit, work, or meet expectations. Despite the hassle, she believes it’s worth the effort to get a refund, even if it means paying a small restocking fee. “There is no bigger waste of money than buying something that you don’t use or don’t wear,” she says.
High-Yield Savings Accounts
Allocca avoids traditional savings accounts with low interest rates, instead opting for high-yield savings accounts offered by online banks. These accounts provide significantly higher interest rates, currently around 3% to 4%, and help keep her savings separate from her checking account.
Credit Cards for Rewards and Protection
Allocca exclusively uses credit cards for all her purchases, citing two major benefits: rewards and purchase protection. She recommends using credit cards only if you can avoid carrying a balance and paying your bill in full every month.
Avoid Impulse Purchases
Sales and discounts can be tempting, but Allocca advises against buying something you don’t need just because it’s discounted. To avoid unnecessary purchases, she recommends unsubscribing from store emails and texts, and curating your social media feeds to limit exposure to influencers promoting discounts.
Track Your Expenses
Allocca believes keeping a detailed record of your spending is one of the most powerful financial habits you can build. By logging and reviewing your purchases, you gain clarity on where your money goes, which informs your day-to-day spending decisions. This habit has made her more financially confident and ensures her spending aligns with her goals.
By adopting these smart financial habits, you can take control of your finances, make informed spending decisions, and achieve long-term financial stability.
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