How to Stop Bad Financial Habits: A Guide from Academy Bank

Bad financial habits can sneak up on anyone. Whether it’s overspending on your credit card, neglecting your savings account, or living paycheck to paycheck without a clear plan, these habits can harm your financial well-being over time. Fortunately, with some guidance from your community bank, you can break these habits and take control of your money. In this post, we'll explore practical ways to build better financial habits using tools like checking accounts, secured credit cards, and savings accounts.

1. Track Your Spending with a Checking Account

One of the first steps to breaking bad financial habits is understanding where your money goes. Many people fall into the trap of not tracking their spending, which can lead to overspending and financial stress.

A checking account is a powerful tool to help you monitor your spending. Academy Bank offers online banking and mobile apps that allow you to track every transaction in real time. By reviewing your purchases regularly, you can spot unnecessary expenses and find areas where you can cut back.

PRO TIP: Set up account alerts through Academy Bank’s Online Banking to notify you when your balance is low or when large transactions occur. This will help you stay on top of your spending and avoid overdrawing your account.

2. Tackle Credit Card Debt by Using a Secured Credit Card

If you have a habit of carrying high balances on your credit card, it’s time to address it before it leads to long-term financial trouble. One way to improve your credit habits is by switching to a secured credit card.

A secured credit card like Academy Bank’s Credit Builder Secured Visa® Credit Card¹ requires a cash deposit upfront, which serves as collateral and determines your credit limit. It’s an excellent tool for rebuilding your credit if made mistakes in the past. With a secured credit card, you can practice responsible spending by only charging what you can afford and paying it off each month. Plus, your activity is reported to the credit bureaus, helping you build or repair your credit over time.

PRO TIP: If you’re wondering what to buy to build credit, we suggest using your secured credit card for small, manageable expenses like groceries or gas. Make you pay the balance in full each month. This helps avoid accumulating debt and interest charges.

3. Set Up Automatic Transfers to Your Savings Account

Not prioritizing savings is a common bad habit that can leave you unprepared for emergencies or future goals. A simple way to break this habit is by automating your savings.

If you have a savings account with Academy Bank, you can set up automatic transfers from your checking account to your savings account or round up your debit card purchases through our Savings Cents program.² By doing this, you ensure that a portion of your income goes into savings every time you get paid—without needing to think about it. This method helps you save consistently, which is key to building a healthy financial cushion over time.

PRO TIP: Start with a small, manageable amount, like 5-10% of your income, and gradually increase it as your financial situation improves. Be sure to make saving money a habit, not an afterthought.

4. Create a Budget and Stick to It for Healthy Financial Habits

Without a clear budget, it’s easy to fall into the trap of spending more than you earn. Creating a budget allows you to prioritize your financial goals, control your spending, and identify areas where you can improve.

Start by listing your monthly income and expenses, including all bills, debt payments, and discretionary spending. Tools like your checking account statement can help you accurately track your spending habits. Once you have a clear picture, adjust your budget to ensure you’re living within your means and making room for savings. Academy Bank offers a Home Budget Calculator that helps you track your expenses.

PRO TIP: Review your budget at the end of each month and make necessary adjustments. This will help you stay on track and avoid falling back into old habits.

5. Build an Emergency Fund to Avoid Credit Card Dependence

Relying on credit cards for unexpected expenses can quickly lead to debt. To avoid this, focus on building an emergency fund in your savings account. An emergency fund acts as a financial safety net, allowing you to cover unforeseen expenses—such as car repairs or medical bills—without having to rely on credit cards or loans.

Aim to save at least three to six months’ worth of living expenses. While this may seem like a large goal, starting small and contributing consistently will eventually help you reach it. Try Academy Bank’s Compound Interest Calculator or Savings Goal Calculator to see how long it will take you to achieve your financial milestones.

PRO TIP: Direct any windfalls, such as tax refunds or bonuses, into your emergency fund to give it a significant boost.

6. Cut Back on Unnecessary Fees

If you’re frequently hit with overdraft fees or late payment penalties, it’s time to put an end to those unnecessary charges. Small fees may seem insignificant, but they can add up and drain your checking account over time.

Academy Bank offers tools to help you avoid fees by setting up account alerts, overdraft protection, and automatic bill payments. Keeping a close eye on your balances and scheduling payments can help prevent avoidable charges that hurt your finances.

PRO TIP: Many banks offer budgeting tools within their online banking platforms to help you manage your account and avoid overdrawing your funds. Visit our financial calculators page to see all the financial tools available through Academy Bank.

Building Better Financial Habits for Long-Term Success

Breaking bad financial habits doesn’t happen overnight, but with the right tools and mindset, you can regain control of your money. By using your checking account to track spending, responsibly managing your credit card or secured credit card, and growing your savings account, you can set yourself up for long-term financial success.

Academy Bank is here to support you every step of the way, offering the tools and resources you need to build a healthy financial future. It’s time to ditch the bad habits and take charge of your financial well-being!

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¹ Subject to credit approval. Improved credit score is not guaranteed. Transaction and Penalty fees apply. Credit Builder Savings account required. $5.00 quarterly fee charged to the Credit Builder Savings account if not enrolled in eStatements. Credit score is determined by credit reporting agencies based on multiple factors, but satisfactory performance on a credit card product can improve your credit score. Default on a credit card, including missed or late payments can damage your credit score. Once added, funds cannot be withdrawn from the Credit Builder Savings account and the Credit Builder credit card without closing the savings account and the credit card.

² Choose from $1 to $5 increment to round up on your debit card purchases from your checking account. Each night all the extra change will automatically transfer from your checking to your savings.