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7 Money Habits to Make (or Break)

Do you ever get to the end of the month and wonder where your money went? Like why is there nothing left? Friend, I have been there! With a background in the finance industry, and reading about a bazillion financial statistics over the years, I’ve realized that good money management is far more about money habits than it is about anything else. The behaviors that drive your financial decisions play a big role in the success of your money.

If you’ve ever tried to change a habit, you know it’s hard to break that behavior. It’s like that period of time in my twenty’s when I had a horrible habit for ‘breakfast.’ I used to stop by the gas station every morning on my way to work, grab a soda (because I needed caffeine and didn’t drink coffee) and a doughnut and eat it on my drive in.

I’m totally embarrassed about this now, but I think sometimes we have lessons to learn and I’ve definitely learned this was not a good use of my money and that I could have made healthier choices. Sometimes, even when we know the habit is bad we continue to do it anyway because it’s an easy choice or it feels more natural to stay on the same path.

Well the same thing is true with money. Most of us have some money habits that could be eliminated or improved and the key is to change the behavior that leads to those habits. I’ll explain more below. Making a new good habit is usually easier than breaking a bad habit, so we’ll start there.

Money Habits to Make

1. Save money automatically

This can be a huge part of your overall success with money. I know it’s helped me significantly! Here’s the thing about saving more money automatically: it’s so easy once you set it up. It’s sort of like a set-it and forget-it kind of thing, but by creating the routine with your money, you’ll think about saving money first in the future.

Saving money automatically can mean working with your employer to have a portion of your paycheck immediately transfer to a savings account when you get paid. Or it can mean you intentionally saving money by setting up a transfer from account to account, or even to a different bank!

For instance, if you decide that you want to buy a new home, or go on a bucket list trip, and you need to save $10,000 to reach your goal. You can automate that savings to help build the money to reach your goal. So you could have $100 automatically transferred out of your checking account into your savings account on a weekly basis by setting up reoccurring transfers from a checking account to a separate account. In less than two years you’ll have $10,000 saved up for your goal!

You can also transfer money automatically to your savings account to build an emergency fund, buy your next car with cash, or whatever else you’re saving for. This should be in addition to your 401(k) or other retirement savings.

Note: If you’re trying to save up for a big goal, I’d highly recommend to open a completely separate account for it. Even having it at another bank is helpful, so you’re not tempted to dip into it or spend it on something else.

money habits to change

Photo credit: Nikki’s

2. Track your money

Tracking your money gives you the ability to see exactly where you’re spending your money, and where you could cut back. Tracking your income and expenses is typically the first step to budgeting. I always recommend this first because you can’t necessarily build a good budget without knowing where your money goes.

Are you spending $200 at Target every week, just wandering the isles? Are you spending $150 a month buying clothes by following your favorite fashion bloggers on Instagram? By identifying where your money is going first, it will give you a good idea of your current spending habits and where you can improve.

After you know where your money is going, do this test to see if it’s in alignment with your values. If it is – that’s great! But if it’s not, don’t worry. It’s a process and it takes some time.

You can track your spending using a notebook, an excel spreadsheet, or a number of apps and online tools. This article includes my favorite ways to track spending. I started out almost 15 years ago with a simple excel spreadsheet!

Track your money monthly, weekly or per pay cycle, whichever is easiest for you. Just be consistent so you can identify trends and make better money decisions based on your goals and values.

Read next: Budgeting 101: How to Make a Budget in 3 Simple Steps

3. Create a ‘saving first’ mentality by saving more when you can

If you’re not saving first now, it will feel hard to let go of some money right away. But think about it as paying yourself first, before your other bills or miscellaneous spending. So next time you get a raise, put it in your savings instead of letting it go into your regular account.

Let’s say you get a 4% raise in your next annual review. The day that you find out about that raise, make a plan for it! Because you likely will not even miss it if you do this right away.

Add that 4% to your retirement account. Or if you’re creating an emergency fund or another big goal, set it up with your HR department to have it go straight into a separate savings account.

This is a strategy my husband and I use to save money for our vacations. Many years ago when one of us would get a raise or promotion, we’d simply take a portion of the new income and send it straight to a vacation fund account. We never even missed it in our regular spending money, and it helps us to continuously save money for vacations time and time again.

55 Ways to Save Money

Ahhh, saving money. Seems like everyone wants to save money for their next car, house, vacation, or other large expense. I’m always looking for new ways to save money for my next travel adventure. Right now I’m dreaming of the beautiful beaches of St. Criox and it’s not cheap!

Let’s talk bonuses for a minute. If you’re getting a bonus soon, you’ve probably worked really hard for it! You might be tempted to spend it. Hey, I can’t blame you! You could consider using 50% of your bonus as savings, and the other 50% to treat yourself or your family to celebrate. Think about how that could help you financially while still allowing you to feel like you can enjoy the bonus.

You can do the same thing with a tax refund, birthday money, a rebate check or whatever other money gains you might receive! As soon as the money hits your account, pull it into a savings account. You’ll be glad you did! After all, I don’t think many people say ‘I wish I would have saved less money.’

4. Use money-saving apps when shopping

This one might be the easiest one yet, as long as you use it correctly. There are a million money saving apps to use when shopping, and some people save crazy amounts of money using them! If you don’t use money saving apps now, download a few today. Find which money-saving apps work best for you based on the places you shop and the things you usually buy. My favorites are Retail Me Not, ibotta and Target. Your local grocery store probably has one, too.

But friend, here’s the key to using these apps wisely: only use them for the savings! Stay off the promotions or offers section of the app to avoid spending more money than you originally planned.  And make sure to turn off push notifications so they can’t send you new sales offers.

Money Habits to Break

Alright so now that you’ve got some options of good money habits to create, let’s get to the harder ones: the money habits to break!

money habits and money goals

Photo credit: Nikki’s

5. Stop paying fees and interest

If you’re regularly paying anyone late fees, it’s time to let it go (like the Frozen song, friend)! Take control of your finances and track your money so you know how much you have in your account at all times… refer to number two above. You will find it way easier to avoid late fees if you’re watching your spending closely.

If you regularly pay a fee to your bank or credit union just for having your savings or checking account, it’s time to switch accounts. There are banks and credit unions near you that offer fee-free accounts, either locally or online-only digital banks. Yes, it can be a pain to switch, but it’s worth it not to pay monthly fees for them to simply hang onto your money.

Lastly, if you’re paying interest on credit cards attack that with intensity to reduce your balance. Interest on cards can be 30% or more, which is simply crazy! Now if you’re thinking “yea, but how?” I get it! I was there once, too. Here’s a complete guide to how to get out of debt.

6. Change your routine and the ‘extras’  that go with it

Remember at the beginning of the article when I talked about buying soda and doughnuts every morning? Well what helped me break that bad habit is that I made it more inconvenient to stop at the gas station every day. I changed my route to work which had an impact on my decision to stop there. Then I started grabbing breakfast at home before I left for work, which was a change in my routine. I’m happy to say that today I usually only stop at a gas station to get gas!

So where are you routinely spending extra money? Take a look at your daily and weekly routines to identify times when you spend money based simply on your current habits. Then let’s change that money habit!

Is it a morning latte on your way into the office? Perhaps it’s browsing the home decor section at Target every time you walk in the store, when you’re simply there to buy toilet paper. Do you buy 15 more things than are on your list every time you go to the grocery store? Or is it checking out your Etsy notifications for the cutest handmade jewelry you’ve ever seen? (Except last week, and the week before…)

Make it inconvenient to keep the routine that’s costing you excess money. Challenge yourself to delete the app, stick to your list or make your coffee at home. Do whatever else you need to do to change your money habits. People are creatures of habit and once you break the habit the first time, it only gets easier from there!

7. Stop buying from retailers’ emails

Why is a retail company emailing you? Oh yeah, to get you to buy more stuff! They’re likely not offering you entertaining tips, helpful advice or information that will better your life. I mean, if they are then keep them! But most of them are probably offering you a chance to save 30% (but spend 70%) on a new item. Just think about how many offers you get on a weekly basis from retailers trying to sell you the next best thing.

It’s really easy to hit the unsubscribe button for a retailer that emails you every single time they have a sale. And some retailers have the best ever sale on a daily basis, based on the number of emails they send. So remove the temptation and kick the bad money habit of purchasing something every time your favorite store emails you a great deal. Just think about it: if you didn’t intentionally walk into their store or search their website for something specific, you probably weren’t in need of the item anyway.

So there you have it! Four new money habits to adopt and three old money habits to break. Little by little, each financial decision that you make can add up to success with your personal finances. By adopting these money habits and changing your behavior, you’ll take control of your finances and feel better about your money goals.

Okay so tell me: which money habits do you think will be the hardest for you? Which ones will you tackle first? Comment below. 🙂

7 money habits to make or break

Heather H

Wednesday 2nd of January 2019

Great point about recognizing if your routine causes you to spend money. I used to stop for a latte on my way in too, until I added up how much money (and sugar) I was spending. I've tweaked my routine for a more basic coffee and enjoyed the savings!


Thursday 3rd of January 2019

Yes! It's nice to splurge but I also enjoy saving money by making things at home! Thanks for stopping by the blog today. :)


Wednesday 2nd of January 2019

Very useful! Thank you so much for sharing these tips!


Thursday 3rd of January 2019

You're so welcome, Iris! Glad you found them helpful. :)