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Whether you look forward to rolling up your sleeves and digging into your finances or avoid these chores like the plague, regular attention is essential to good financial health. There are plenty of standard exercises to keep your finances firm and fit, but why not treat your money to a quarterly day at the spa?
As you think about how to manage money better this year, make a New Year’s resolution to reward your money for working hard for you.
Use the menu below every three months for an exquisite afternoon of metaphorical white towels and cucumber water to refresh your money’s potential. Nobody said better money habits have to be boring.
Lavender Swedish Massage: Let the tension out of your budget
If any one aspect of your financial life deserves some special attention, it’s your budget.
You might bristle at the word budget, but it doesn’t always have to be painful. As personal finance guru Dave Ramsey says in his book Complete Guide to Money: “Many people see a budget as something restrictive, something that binds them up and takes away all their choices and freedom. That’s a totally wrong view.” While Ramsey recommends that you tweak your budget monthly to identify accidental or careless spending, consider an additional approach. Give it a relaxing massage.
Put the calculator away and instead take the bird’s eye view. Work out the tight spots in your budget’s muscles. Assess categories one by one to ensure they align with your deepest personal goals and values.
Rather than simply slashing your spending, take time to meditate upon what really is important to you. Maybe you realize you’ve been watching too much television lately and would rather take a trip to the Grand Canyon. Can you reallocate some dollars toward your vacation fund by cutting the cable and buying a cheap streaming service? You can, if that’s what you truly want. Consumers often consider spending as necessary because it’s habitual rather than a reflection of what’s truly important to them.
Infrared Sauna Body Detox: Keep impurities out of your credit report
If left unattended, bad information can build up and form toxins in your credit. Energize your leveraging power by detoxing your credit report. Thanks to the Fair Credit Reporting Act, you can get a free credit report from each of the three major credit bureaus at www.annualcreditreport.com.
But there’s more to the story. Many lenders use FICO (or the Fair Isaac Corporation) to determine your creditworthiness. FICO is an independent corporation that produces predictive analytics about your ability to repay credit. Learn more about the specifics of how FICO determines your score here.
The FICO algorithms are highly private, so there’s no real way to know how they’re arriving at your score. But you can apply a few basics to your credit picture to keep it balanced, healthy and working in your favor.
Review any negative marks on your credit report. If something doesn’t add up, dispute it. Disputes can be done online at each of the major bureau’s websites, and they are required by law to investigate within 30 days.
Pay your debts on time.
Obviously, right? But shore up your confidence in this area. Late payments are the single most destructive component to your credit score. Set up automatic credit card payments or bank drafts for all installment debt.
Keep your debt in check.
Excessively high balances are a major red flag, even if you’re paying on time. Also, be careful not to make too many applications that trigger hard credit inquiries. Yes, you might save 20% on your purchase at the mall if you get a store credit card, but it’ll hit you hard in the long run if you rack up too many of these.
Read more from Bankrate on how to increase and protect your credit score here.
European Moorland Mud Bath: Enjoy the anti-aging benefits of saving and investing
Occasionally, it’s nice to bathe in our successes. Bloomberg correspondent Steve Burkholder says, “If you’re saving, you’re succeeding.” Flaunt your glowing, radiant success by reflecting on your savings plan. Increase savings where you can. Make sure you consider these key elements:
Do you have 3-6 months of expenses saved in a liquid account for rainy days? Maintaining this fund will offer you security and minimize stress (which is handy if you’ve also made a New Year’s resolution to reduce the appearance of fine lines).
Relax in retirement.
As the single highest priority in a long term financial plan, make sure you’re putting at least some small portion of your income toward your retirement lifestyle. Utilize your tax advantaged savings vehicles. Have a 401k at work? Contribute as many pre-tax dollars there as your budget will allow. If your employer offers a matching contribution, make it a goal to contribute at least as much as your employer will match. Otherwise you’re leaving a portion of your compensation on the table. The next milestone should be maximizing your own contribution. Learn more about contribution limits here.
If you don’t have a 401k, consider opening an IRA account as soon as possible to save toward your retirement. Starting a Health Savings Account (HSA) can be a brilliant way to save toward retirement healthcare expenses as well. Much like a skin care regimen, taking even small steps now will have big payoffs in the long run.
Treat your investments to some luxurious attention.
It’s a good idea to be aware of how your investment accounts are allocated — even the generic funds you might find in your 401k. Brush up on the latest in market trends to make certain you have the wisest investments working for you. If you have investment accounts apart from your 401k, schedule some time with a financial adviser to make sure that your overall investment strategy is taking the appropriate amount of risk.
Master Salon: Manage spending in style
The last activity on the menu of better money habits is meant to nurture areas in your financial life that are easy to ignore but grow ugly if left unkempt. In the same way you might enjoy an afternoon with a professional hairstylist or manicurist, regularly pruning your service providers is essential to a beautiful financial plan.
Check your bills for higher charges
Compare your bills month over month to note any changes in your total amount due. Particularly in the highly competitive markets of internet or wireless, providers often offer introductory pricing that will expire at a certain point in your contract. Take advantage of your many options by calling your provider and requesting an updated promotional rate. If the rate is no longer competitive, consider changing providers.
Keep your eyes open for increased usage
This awareness is especially important with your utility bills. Increased usage may indicate places where your home is not energy efficient, and planning for some upgrades can save you big money. If you notice that you’re going over your data limits with your mobile company, there may be a more cost-effective plan that will help you practice better money habits.
Stay on top of interest rate hikes
Make certain you know exactly how much interest you’re paying on any of your debts. If you have a credit card with a low introductory APR, be aware of when that intro period runs out. Any adjustable interest rate loans that you may have should be watched regularly, so that you can pay it off or refinance it before it drains your bank account with unreasonable interest.
If you’d benefit from transferring a card balance to a new 0% intro APR card, compare some of your best options here.
Treat your money (and yourself) better in 2019
Every New Year’s resolution is personal, and resolutions about personal finance are no exception. If you want your money to work for you, show it how much you appreciate it by treating it regularly to some tender loving care. A quarterly spa day is a cleansing, restorative experience for your finances, and it will pay you dividends in peace of mind, too.
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