Pay off your credit cards monthly
The average American has $7,000 of debt, racking up fines on their credit cards, and this is the number one financial mistake people in their 20s and 30s make, says Carla Dearing, a certified financial planner and CEO of SUM180, a digital financial planning service. “Too many people think a little credit card debt is no big deal, but do you know what the acceptable amount to carry over is? Zero,” she explains. Because of their high interest rates, paying off your credit cards every month should be your number one financial priority. Once you do that, you can incorporate these ideas to save more than $1,000 every month.
Save six months’ worth of expenses
Half of adults don’t have $400 in case of an emergency, much less the money they’d need for a broader event, like losing a job Dearing says. “Everyone knows they should be saving more money but that’s where they get stuck,” she says. “The trick is to know your ‘number.'” And by ‘number’ she means the amount of money it would take to cover six months of your basic expenses. Just sitting down and writing out your expenses—even if you don’t start saving right away—is a huge leap forward as it will help put you in a savings mind frame, she adds. Need some inspiration? Check out these 17 habits of people who are great at saving money.