Five Money Habits that will Change Your Life

Money is something that is a part of our everyday lives. It is something that we all know that we should be better at, yet we don’t really get around to it. That is how I lived most of my life. I thought I wasn’t bad with money because I didn’t spend that much money, or so I thought. Budgets weren’t a part of my lifestyle so there was no way for me to actually know how much money I was actually spending. The thought of building wealth was a concept of the far future. I mean I will eventually retire, right? I want to share with you the five money habits that I developed over the course of my personal finance journey that has helped me get good with my money. If you are at the beginning of your personal finance journey, these habits will help you get good with money in no time.

1.) Educate yourself with all things personal finance

As much as we want to be angry with the American school system for not teaching us any financial literacy skills, financial education is more accessible than ever now and can even be free. I taught myself all things personal finance through different avenues. Personal finance is not common sense, but once you commit yourself to learning as much as you can about money, you will learn how to be your own money expert. I recommend using at least one of these avenues to educate yourself for at least 15 minutes a day.


YouTube is a great way to learn about personal finance. During my work lunch breaks, I would listen to personal finance YouTubers talk about different personal finance topics such as budgeting, investing, reviewing bank and brokerage accounts, credit cards, retirement accounts and so many other topics. Although you must take the tips with a grain of salt because many of them are not licensed to give financial advice, it is a great way for you to get thinking about how you can apply what you learned from the videos to your own life. There are so many personal finance YouTube channels out there. Find one that resonates with you.

Here are some YouTube Channels I recommend:

The Financial Diet

The Financial Diet puts out a lot of great video content geared towards women. The Financial Diet is refreshing because they do not like to shame others for their money habits. They put out a variety of different video content such as budgeting tips, investing, career advice, talking about money, and so many different money topics. My favorite segment they have is The Financial Confessions, which is also a podcast, where they have experts in their field talk about how they live and interact with money, with many of the guests being women of color.

Investing with Rose

If you need a breakdown on how to invest and explain investing terms, then the YouTube channel Investing with Rose is it.


If you are looking to improve your credit score, then MissBeHelpful is the YouTube channel for you. Yanely Espinal is a financial educator by profession that is passionate about spreading financial literacy to her community. Her personal finance story is relatable to us in the Latinx community, and she explains it like if she was your older prima looking out for you. And if she couldn’t get any more amazing, she is also Dominicana.


You can gain so much knowledge from reading books and I believe that this is the most credible source that you will find when it comes to educating yourself with personal finance. It is one of the greatest investments you can make in your life. If having a tangible book is not your thing, you can always purchase an eBook or if buying books isn’t your thing either, you can check out a physical book and even an eBook at your local library. I did not want to contribute to adding more clutter in my house, so I checked out all of my eBooks via my local library. I recommend reading for at least 15 minutes a day and to take notes of what you have learned for future reference.

If I can recommend one personal finance author, it would be Erin Lowry. Her Broke Millennial book series are gems for anyone starting out in their personal finance journey. What I really like about Lowry’s books is that her writing style is very conversational and not dry like other personal finance books. She gives great practical advice while using real life scenarios.


Podcasts are great to listen to while you are working, driving, cleaning or doing any mundane task. It is a great opportunity to learn about personal finance. I recommend taking around 15 minutes of your day listening to your favorite personal finance podcast that speaks to you.

Here are some of the podcasts I recommend:

Yo Quiero Dinero Podcast

Bad With Money with Gaby Dunn

The Clever Girls Know Podcast

2.) Set a monthly budget

The “B” word gets a bad reputation. When people hear the word budget, they immediately think of someone that does not have any money or just not having a good time. But really setting a budget can be the complete opposite. I would say it is liberating to set a budget because it can give you peace of mind. Instead of guessing whether you spent more money than you made you will have control of your money and you will be able to spend your money guilt free. If all the successful businesses in this world have a budget, you should too. Now the good thing about budgets is that there are several types of budgeting methods and several types of budgeting tools you can use. Pick a method (or a combination of methods) and tools that works for you and stick to it.

Budgeting Methods

  1. Zero-based Budget – gives every dollar in your budget a job.
  2. Pay Yourself First Budget – ensures that you save and invest first before you pay your bills.
  3. Envelope System Budget – uses cash in envelopes to physically portion out your monthly income for your monthly expenses in different categories.
  4. 50/30/20 Budget- this budget method allocates your budget to 50% to “needs”, 30% to “wants”, and 20% to savings.

Budgeting Tools


My favorite app for budgeting is Personal Capital because it also allows you to track your net worth. You must integrate all of your bank accounts, brokerage accounts, and/or mortgage/loans if you have any in order to accurately calculate your net worth.

Some other popular budgeting apps are Mint, YNAB, and the Charlie app. YNAB and Charlie are not free, but some users swear by them and say it is worth the price.

Budget Planner

This is my favorite way to budget and track all my expenses and money goals. You are either a notebook and pen type of gal or not. This is a great choice for those that like to get crafty and prefer a tangible book than their phone or computers. You can create your own budget planner with a regular notebook, download and print budget planner printables from your favorite budget blogger’s website or Etsy shop, or buy a budget planner notebook.


If you love Excel or data gets you excited, then this is the right budgeting tool for you. You can either purchase or download a free budget spreadsheet or just build one yourself. There are many online tutorials that can teach you how to personally build your own budget spreadsheet. I personally use a budget spreadsheet to set my bare bones budget in place to know what I have to spend on a monthly basis.

Whichever method and tool you use, make sure that it is right for you and that you will stick to it.

3.) Investing on a Monthly Basis

Investing on a monthly basis is one of the most powerful wealth building tools you can use. You do not have to physically invest your money every month and track the stock market. What you can do is set your investments to automatically invest in an index fund every month. That way you are not spending any time picking stocks or transferring money from your bank account to invest. Now while you are at it you can also set your dividends to automatically reinvest as well. For those that are not comfortable with money automatically taken of your bank account, don’t worry. You can still invest with as little or as much as you want in the following Investment Accounts:


I would recommend starting with your employer’s 401(K) program first. Please be sure to contribute to your 401(K) up to the match or else you would be missing out on free money. Get to know your 401k by knowing how much you are contributing and if you would like to up your percentage contribution. This is a great investment to start with because a percentage of your paycheck is automatically taken and put in your 401(K). As of 2021, the contribution limit is $19,500.


Contribute to your Roth IRA or Traditional IRA after you have contributed to your employer match. You can set an investing goal to max out your Roth IRA. This is a great investment account because it typically has more investment choices than your 401(K). The contribution limit for both IRA’s in 2021 are $6,000.

Taxable Brokerage

After you have maxed out your IRA and 401(K), you can also invest in a taxable brokerage account. Although many personal finance experts strongly suggest you max out both IRA and 401(K) retirement accounts first, you don’t have to if it does not meet your money goals. The beauty of this account is that there are no contribution limits or age restrictions. If you are young and would like to access your investments before retirement, I would recommend you set a money goal (within the timeframe of 5-15 years) and invest in this account as well as the ones above monthly.

4.) Pay off your credit cards in full every month

Have you ever heard anyone tell you that you should keep a little bit of a credit card balance to build your credit? Well, I believed this money myth to be true for many years. This is one of the biggest money misconceptions. Not only is this not true, but it can hurt your credit and what will end up happening is you will have to pay more the longer it takes you to pay your credit card balance. This is how some people get into massive credit card debt that will take them years to pay off. If you are still currently in debt, I recommend paying off your credit card debt ASAP to reap the benefits of using credit cards.

Why pay all your purchases using your credit cards? Here are some good reasons why you should always use your credit card for purchases if you are debt free:

  1. Earn Rewards
  2. Builds credit when you pay monthly balance in full
  3. Credit Cards offer protection against fraud and theft
  4. Easier to dispute transactions you didn’t make than debit cards
  5. Great way to easily track your spending

Please be sure to make it a habit to pay off your credit card balance in full every month. You can set your credit card to automatically pay your balance every month to give you peace of mind. Remember that credit cards are an excellent way to build wealth when used with discipline.

5.) Talking about money with your friends and family

Talking about money with your friends and family can be a daunting task, but it is something that can help you improve your relationship. You don’t have to get financially naked with the person, unless this person is your partner, in order to have open money conversations. Open money conversations can look like you telling your friend that you can’t afford to eat out at the expensive restaurant every month because you are on a budget instead of lying to her by saying that you are busy. Let people know where you are at financially and let them know you have money goals.

Money is such a touchy subject because it can ruin relationships. I do not recommend you lend anyone any money that you cannot afford to lose. Once you start changing your mindset around this, then you can start letting go of that anger of someone not paying you back. Be sure to also know your boundaries and know when to say no.

Set money dates with your partner. If you are in a serious relationship with someone, even if you don’t plan on marrying them, I highly recommend you get financially naked with the person. You and your partner should know how much each other make, how much debt you both have, what your net worth is, and how you would like to split expenses. Open communication about your money is key to a healthy relationship. Figure out a method that works for the both of you. No partner should ever make their partner feel like there is a power imbalance in their relationship when one partner earns more or should have complete control of the money. Remember to handle these conversations with care and empathy.

There are many scenarios in which you can talk about money in your life such as the workplace, with your friends, parents, vendors, etc. You can read more about how to talk about money with the people in your life in Erin Lowry’s Broke Millennial Talks Money book.

*Disclosure: I only recommend products I would use myself and all opinions expressed here are my own. This post may contain affiliate links that at no additional cost to you, I may earn a small commission. Read full privacy policy here.“

No Soy Coda

Karen Carranza is a personal finance content creator and enthusiast. She is a first generation Mexican American determined to build generational wealth and spread financial literacy through her blog, workshops, and Instagram page.

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