What’s Your Financial Next Normal?

Your current financial situation doesn't have to dictate your future. There’s always an opportunity to boost your financial savvy and develop habits that set you up for success, even if you’re rebuilding after debt relief. Small, yet powerful changes could get you closer to a new financial normal. Here are some ideas to create a new financial normal that better aligns with your financial goals.   

How You Spend Your Money

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How you manage your money has a direct impact on your financial health. Take spending choices. If you’re not tracking your spending, how do you know you’re not overspending? Every spur-of-the-moment restaurant delivery order makes it harder to reach financial goals. Enough chai lattes can cut into how much you save for the future. You might be accumulating credit card debt—an expensive way to pay for an order of tacos. 

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If you’re unsure how much money you spend or where your money goes, you’re not alone. But it's never too late to change your spending habits to fit your new financial normal.  

First step in a spending overhaul: Review your bank and credit card statements. You may want to check at least a few months of statements, in case some months have unusual, one-off expenses. Think about which costs could be cut and where you can spend less. 

Establish a monthly budget and set some spending limits. You may find Freedom Debt Relief’s budget worksheet helpful. 

Your new spending habits could help you free up some money to reach your personal finance goals. 

If you have outstanding debt, look for non-essential expenses to cut until it’s paid off. If your debt feels unmanageable, it may be time to explore debt relief. 

Related: How to Make a Budget Plan Even If You Hate Math

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How You Save Your Money

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A lot of people aren’t taught how to save. So if you’re someone who isn’t saving systematically on a regular basis, that’s normal for about half of Americans. You may not have an emergency fund or a retirement account. And that’s OK. Start today. 

If you’ve begun looking at how you spend, congratulate yourself. Spending and saving are two sides of the same coin. The less you spend, the more you could save. 

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An emergency fund doesn’t just help you take care of those surprise bills that life throws at you. A cash cushion could also help you feel more financially secure. It's never too late to begin saving—and there’s no such thing as a goal that’s too small. 

If you have just a few dollars or no savings at all, consider setting a goal of $500. You might save $10 a week, and watching your balance grow can help you stay motivated. At that rate, you’ll have $520 in a year.

If you don't have enough cash to save as much as you'd like, look for ways to increase your income. 

Related: How to Save More Money

How You Invest Your Money 

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Investing can be intimidating. And it’s common for people to think they have plenty of time and can start investing some other day. But if you want a more comfortable life later on, building a nest egg is the way to get there.    

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Invest in future you. Now is a great time to forge an investing strategy. Start by learning more about investing. Big brokerages like Fidelity, Vanguard, and Charles Schwab have information and tutorials on their websites, and licensed financial advisors who can explain what investment accounts might work for you. If you have a 401(k) account at work, the plan administrator can help you figure out if you’re investing yours in the way that makes sense for you. 

If you’re a new investor, consider starting with some low-risk investments. low-risk investments to explore are: 

• Bonds. Compared to stocks, bonds generally pose less risk. But they aren't 100% risk-free. Typically, you buy a bond for less than its face value. You may earn interest payouts while you hold the bond. You can cash in your bond for the full face value once the bond reaches maturity. You’ll know the timeline when you buy the bond.

• Money-market funds. This is a mutual fund, which basically means a collection of investments. Holding a variety of investments is a way to lower your risk of loss. Money market funds typically invest in low-risk assets like cash, Treasury bills, and certificates of deposit.

• Certificates of deposit. A certificate of deposit (CD) is a kind of savings account with a fixed interest rate and withdrawal date. It comes with a guaranteed return. But you usually have to leave your money in the CD account for a certain amount of time before you can get those earrings. CDs terms often range from six months to five years.

Robo-advisor apps are a type of investing app. They can simplify the process of investing in your future if you’re new to investing. A robo-advisor will ask you some questions to determine your risk tolerance and goal. Then, they’ll invest your money for you using special algorithms that match the kind of investor you are. 

You can become a retirement saver with little effort.

Related: Seven Ways to Save More for Retirement, Starting Now

How You Bank and Shop 

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If you pay extra bank fees, that’s a bite out of your balance.

Credit card fees could be another swing at your finances. For example, if you carry a balance, credit card interest is expensive. But you can commit to making changes on your quest to reach your next financial normal.  

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Ready to slash the fees you pay? First, check whether you’re paying monthly maintenance fees. If you are, find a bank that charges zero for maintaining an account, even if you don’t have a lot of money in the bank. If your local banks don’t offer free accounts, look online. Switching to a fee-free bank could result in significant savings. 

If you can, pay your credit card balance every month. If you do, you’ll avoid credit card interest fees. If your credit card has an annual fee, you may also want to switch to a no annual fee credit card. Every extra dollar you pay adds up and impacts your wallet.  

Healthy Financial Management Is Key, Now and in the Future

Learning to deal with debt, money, and unexpected financial roadblocks isn’t difficult. Some small, simple steps—saving $5 a week, cutting a small expense or two—could make a noticeable difference. Don’t be afraid to ask for help. 

Committing to financial changes can enable you to experience a new financial normal.