Building Healthy Financial Habits

Establishing goals is a good way to start the budgeting process. Goals can be academic, financial or personal. Goals provide you with a context that allows you to better understand the benefits of saving and the long-term impacts of poor money management. Some examples of goals are:

• Academic Goals

  • Graduating on time (the length of time spent in school has significant financial impacts)
  • Getting good grades while in school (these can lead to financial merit awards)
  • Obtaining a certificate, degree or degrees
  • Publishing one's work
  • Becoming a leader in one's field

• Financial Goals

  • Short-term savings goals (placing a percentage of every paycheck in a savings account or accumulating minimal debt prior to graduation)
  • Long-term savings goals (e.g., paying off a car within five years or saving for a down payment to purchase a house)

• Personal Goals

  • Establishing a career
  • Choosing place of residence
  • Tracking earning and spending

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Needs vs. Wants

In addition to budgeting, it is a good idea for you to create a needs vs. wants checklist. The combination of these actions is a good starting point for you to reach your short-and long-term goals. Needs are required for survival, and wants are things that may not be as necessary as you think. Deciding on what are needs and what are wants allows you to decide which expenses are necessary and which are optional.