During these times of economic uncertainty, we all tend to take inventory on our money habits and re-evaluate savings and budgets. Perhaps it’s what you hear in the news about the financial stability of our economy that makes us acutely aware of this important exercise, but smart financial habits are good to develop and implement regardless of what the markets are doing.

Mark Delgadillo

Mark Delgadillo

Consider your credit. Due to changing credit card laws, cardholders may have seen their limits reduced or their interest rates increased. Lower credit limits lower your available credit-to-credit limit ratio, which could ultimately lower your credit score. While you may not want to rid yourself of credit cards, you might lower and eventually eliminate your credit card balances.

Pay yourself first. A real estate market that continues to struggle shows what happens when credit is too easy to get. Now, low- and no-down payment mortgages are mostly a thing of the past. With credit generally tighter, you might also be required to provide a bigger down payment to buy a car or other high-ticket item.

To adjust, pay yourself first each paycheck. When you allot a portion of your income toward investments, you train yourself to think of this amount as you would any other bill that you pay.

Evaluate your savings for financial emergency situations. You’ve most likely put money aside for bigger purchases and other financial goals. So in the event of a financial emergency, you want to avoid having to tap these funds. Instead, consider starting an emergency fund that equals three to six months of income so your savings remains intact.

Think realistically. In this economic climate, aspirations are scaled, and bigger isn’t always better. Smaller homes may result in lower payments, taxes and utility costs. A smaller automobile may be more efficient and less expensive as well. Steps such as these can save you money that you can otherwise put away for long-term goals such as retirement.

For more information on building prudent money habits to help you meet your financial goals, please talk with a licensed financial professional to learn more about available options.

— Mark Delgadillo is a financial advisor for Crowell, Weedon & Co., 111 W. Micheltorena St., Suite 200 in Santa Barbara. He can be reached at 805.618.3160, or click here for more information.