If you could automate how you made decisions for 40% of your everyday life, wouldn’t you want to make sure they are financially-beneficial choices?

According to research, habits account for about 40% of our behaviors on any given day.

A habit is what you do consistently and repeatedly. When facing a decision, a habit is your personality’s default path of which choices to make.

Luckily for us, habits can be changed with some intentional cultivation. If you are going to do so, why not consider what are some good habits to have to keep you on the right track financially.

#1. Be Aware of Your Goals

Everyone has a variable list of financial goals. These goals can be straightforward ones (e.g. replenish emergency fund within XX months,  open an FD) or more complex ones (e.g. clear all debt, build up my investment portfolio to supply passive income that funds my entire retirement by age 50).

To make your goals truly stick, choose meaningful goals. The kind of things that you see the importance of having and you truly believe bring value to your life.

When your goals are meaningful to you, it is easier to keep them at the forefront of your mind. Get in the habit of thinking of them often. Use your goals to determine how you respond to situations. Should you spend on a treat now or would you rather save that money for your goal?

Or in other words, get in the habit of using your goals to stay motivated to keep yourself on track with how you manage your money.

Need help setting out your goals? Here’s our 6 Steps for Setting Your Financial Goals.

#2. Budget and Track Your Expenses

Budgeting is a tool that helps you know where your money is going.

With the right budget that you craft to suit your needs, you can wield your income to properly look after your current needs, your goals, and even have a little extra for your wants.

To do so, it would be valuable to get into the habit of tracking your expenses, reviewing them, and adjusting your budget as needed on a regular basis. While yes this can feel like a chore to remember to do so when you first start, once you form the habit of doing this it becomes super easy to remember and the rest is smooth sailing!

If you want to know more about getting started, here’s our handy 7 Steps to Successful Budget-Setting for Couples, and it works for singletons too.

#3. Keep Organized

There is truth in the fact that you can perform better when everything is in its right place, and this applies to your financial life as well.

Get into the habit of tidying up your financial life. What data you accumulate, you must make time to file away neatly.

Being in the habit of keeping organized also means regularly scheduling reviews so you can re-assess your goals and plans to check that they are still relevant and on track. Toss out unwanted distractions and re-organize the remainder.

Still need convincing? Have a look at 6 Ways Marie Kondo’s KonMari Method Can Benefit Your Financial Habits.

#4. Continuous Learning

The world has so much information to offer. To improve your financial health, cultivating the habit of continuous learning will no doubt be rewarding.

Among some of the options you can consider are:

Get into the habit of wanting to learn more from others. It is a great way to learn about different techniques and approaches that others have employed, while keep your motivation up!

#5. Rank Your Priorities

We all have important things going on in our lives. Sometimes, some are more important than others. Sometimes, some are more urgent than others.

It is important to get into the habit of regularly reviewing your priorities. Why? Because our lives are constantly changing. Needs may change. Opportunities may come and go leaving you behind because you were distracted with something else.

Among the things to habitually revisit prioritization include, but are not limited to:

#6. Seek Balance

In relation to Ranking Priorities, is to get into the habit of striving to seek balance. One can indeed get carried away with sorting obvious priorities while overlooking others.

In the financial sense, this means ensuring you have your financial bases covered (insurance coverage, estate planning, personal finances, etc) and that your investment portfolio is well-balanced.

You also should not neglect our personal side when it comes to seeking balance. Cultivate the habit of self-reflection and introspection. Regularly ask yourself – what makes me happy? Will doing ABC make me happier? Has achieving XYZ made me happy? At what cost and was it worthwhile?

#7. Learn to Say “No”

Temptations are thrown at us all the time. Whether it is in the form of friends inviting you to join them or in the form of a juicy opportunity, sometimes it is all too easy to throw caution in the wind and say “okay, why not”. Don’t do it!

To be successful, you need to learn to say No when you are being rushed or pressured into something. Take time out to deliberate your answer after you have weighed your options.

Another way to go about this is to remove the things you know you are easily tempted by from your life as much as you can. For example, stop attending auctions if you are the sort that gets carried away by excitement.

If you need more help in learning to say No, our 4 Steps for Handling Financial Peer Pressure will prove helpful.

#8. Practice Gratitude

In our fast paced lives, especially in the pursuit of financial freedom, there are times we are caught up so that we lose sight of our present. Take time out to smell the roses.

Get in the habit of practicing a pause. Take stock of what you have and what you are thankful for.

This habit of expressing gratitude and thanksgiving allows you to cherish your blessings.

You will spend your money more efficiently if you are already happy with what you have or need.

Conclusion

Our habits drive our choices therefore it is necessary that we ensure we have the right habits in place if we want to go for gold and set our targets for financial freedom.

Maxwell Maltz, a surgeon in 1950s, put forward a theory that we form new habits by consistently doing the same thing for 21 days. This means that if you start today and focus on adding one new habit at a time, in under 6 months you can have all these 8 habits cultivated within yourself which in turn will help effortlessly keep your financial health in-check.

 

Will you start forming a new habit today? Which would you pick first? 

 

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