Six out of ten Americans make financial goals as part of their New Year’s Resolutions, according to a survey by the Pew Research Center. But simply making a goal isn’t going to make someone automatically successful. Some goals are harder to follow through on, especially when they require major lifestyle — or saving and spending — changes.
Find Out: 3 Things You Must Do When Your Savings Reach $50,000
For You: 5 Unnecessary Bills You Should Stop Paying in 2024
The good news is that creating positive change is doable, even if it seems difficult. Sometimes, all you need is five minutes to start getting your finances on track to where you want them to be.
So, what should you do if you’re trying to sort out your finances? Here’s the five-minute money move experts suggest.
Link Your Accounts to a Budgeting App
In a recent CNBC article, Kevin Coombs, a certified financial planner, gave the following advice: “My five-minute tip is to sign up for a budget app and link your bank and credit card accounts, or whatever you use for spending. … This shouldn’t take too long to do, and the data that starts coming in will be invaluable.”
Once you’ve linked your accounts to an app, you can start tracking your spending. Do this on a monthly basis to see where your money is going. Be sure to include every expense, not just the small ones. This will give you a better idea of your financial situation on both a macro and micro level.
As you start watching your spending, the Coombs suggested asking yourself a few questions. “Was spending higher or lower than the previous month? Why? What do you anticipate for the upcoming month? … Identify the causes of higher-expense months and consider if there are ways to prevent those from reoccurring.”
Don’t worry if you don’t have all the answers right away. It can take time to truly build your financial well-being.
Read Next: Suze Orman Says You Need To Do This With Your Money Before the New Year
Do Other Experts Agree?
What works for one person might not work for another, but experts do seem to agree that the benefits of linking accounts to an app is largely positive.
“Linking your bank and credit card accounts to a budgeting app can be a game-changer. For many people, seeing all their spending and income in one place makes it so much easier to track where their money’s going,” said Mabel Oza, founder of FatFIRESocial. “It’s a big step toward building a better financial picture without the headache of doing it manually.”
However, there are a few possible risks to consider.
“Most open banking providers, like Plaid, go through rigorous compliance checks, because they’re dealing with sensitive data. But the real responsibility starts once that data lands in the app — then it’s up to [the app creators] to keep it safe,” said Oza. “And while the automation is helpful, I always recommend double-checking permissions when connecting accounts. Stick to well-known, trusted third parties like Plaid or Finicity for this stuff.”
Consider Uploading Your Data Instead
If you don’t fully trust the idea of linking all your accounts, one alternative is to upload your data periodically, instead.
“You’ll still get insights, but you’re sharing data on your own terms, giving you more control over your privacy,” said Oza.
You can also customize your app’s permissions.
“Ideally, apps will let you choose what kind of data to sync, so you can connect only the pieces that feel relevant,” said Oza. “This way, you get the benefits of budgeting help without handing over everything.”
Review and Categorize Your Spending Manually
Another five-minute money move that works well is to categorize your spending and review it manually every day.
“Briefly look over your recent transactions in your bank or budgeting app, and then categorize each one as a ‘need’ or a ‘want.’ Like a simple game, this daily check-in gradually helps you understand where your money is going and which spending habits you may need to adjust. It also develops a habit of being more aware of your finances, which is one of the best practices for achieving better financial health,” said Brian Chasin, financial expert and chief financial officer of SOBA New Jersey.
While five minutes might not seem like much, it’s good practice and can keep you connected to your financial goals — and motivated to achieve them.
Assess Your Debt and Save Five Dollars
Nearly half of Americans have credit card debt, according to the 2022 Survey of Consumer Finances as conducted by the Federal Reserve. If you’re one of them, then this next money move is for you.
“If you have credit card debt, decide which one you’re going to pay off first, and save five dollars more this week than you have up to now,” said Ken Robinson, CFP, certified member of the Alliance of Comprehensive Planners (ACP) and founder of Practical Financial Planning. “It’s the most fundamental thing you can do to improve your finances: owe less and save more. But don’t think of it as this big thing. Just make one small step in the right direction.”
Don’t discount the small numbers. Saving even an extra $5 a week is $260 a year. If you owe, say, $500 on a credit card, that’s more than half of your balance right there, excluding possible interest charges.
More From GOBankingRates
- 9 Moves For Building Lasting Wealth: What Smart Americans Are Doing Right
- 9 Cars To Stay Away From in Retirement
- 5 Side Hustles That Can Earn You an Extra $1,000 Before 2025
- 4 Groceries Frugal Retirees Should Buy During the Holidays
This article originally appeared on GOBankingRates.com: The 5-Minute Money Move Experts Recommend
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
