How to develop good money habits


Habits are powerful.  They can propel you toward greatness or keep you from it.  For the most part, habits are driven by the subconscious part of our mind.  This can be good and bad.  It's our subconscious mind that allows us to do more than one thing at a time.  Without the subconscious mind and the power of habit, life would be difficult, and the smallest tasks would require enormous effort.



Remember when you learned to drive?  You had to concentrate constantly on your steering, your foot pressure on the accelerator, how much pressure you applied to breaking, and scanning all your mirrors. All of these took intense focus.  Add to that a drivers-ed teacher, or worse, a parent constantly watching and judging your performance. It’s a miracle you actually got through it!  But you did get through it. After years of learning and gaining experience, you’ve developed a routine, a habit, that makes driving easy, or even relaxing (except for when you’re in bumper to bumper traffic of course).

Most of the things you do are subconscious actions, done out of habit.  Eating, brushing your teeth, doing parts of your job, are just of few examples of habits that drive our behavior.  How we manage our money is also driven by habits, both good and bad.  It’s important to develop good money habits and discard the bad ones.

Habits are formed over time.  When we engage in a repeat activity, we develop a pattern; a series of thoughts and behaviors that increase our ability to do that activity over and over again more easily and more successfully.

Our emotions, how we feel, are a crucial part of any habit.  As humans we gravitate toward anything that gives us pleasure and avoid anything that causes us pain.  Your spending is driven by this reality.  Don’t believe me?  Remember the last time you bought something you REALLY wanted?  How did you feel?  Felt awesome, right?  How about the time you got a bill in the mail that was WAY larger than you expected?  Remember that feeling?  Yeah, me too!  Not my best moment.

Needless to say, good money habits are important if we’re going to attain financial well-being.  There are 4 money habits that the wealthy engage in consistently that lead to their success:



  1. They spend less than they earn
  2. They avoid taking on debt on depreciating items
  3. They save for future needs
  4. They invest to grow their wealth

It’s important to note that most wealthy people in America didn’t start out that way.  Most millionaires today are self-made, first generation millionaires.  A major factor in their success is the consistent practice of these 4 money habits before they were wealthy.  There’s nothing special about these people.  They don’t possess supernatural abilities or have some secret knowledge that the rest of us can’t get.  They simply learned and developed good money habits over time, and so can you.


5 Keys to developing good money habits

1.  Become Aware

You must become fully informed and aware of where your money is going.  The simplest way to do this is to track every expense.  You don’t need a fancy app, computer software, or a spreadsheet to do this, pen and paper will do.  You can learn more about tracking expenses on the resource page.  Download a tracking form and watch this video to learn more.

2.  Understand your Triggers

What triggers your spending?  It’s important to know where you’re overspending money because it will lead you to discover what motivates your spending. Much of our spending is triggered by our wants and desires rather than what we need.  Having a financial plan (a budget) is a great way to define needs and wants ahead of time so you can remain in control of your spending.

3.  Determine your Response

 Decide ahead of time how you will respond when you have the desire to spend.  The best way to control spending and manage money successfully is to have and live by a written budget.  The budget will guide your spending, helping you stay in control, so you make the right decisions.

4.  Build Routines

Routines form habits.  Build routines to help you manage your money.  From recording expenses every day to saving before you spend, every routine you implement will help you develop money habits that will help you reach your financial goals.  Without these routines your financial decisions will be at the whim of your wants and desires.

5.  Repeat, Repeat, Repeat

You learned to drive because you kept doing it until it became easy.  Over time you got better at driving and had to think less and less of the specific, individual functions you had to perform while driving.  The same is true in learning good money habits.  Right now it seems daunting to manage money and build good money habits.  This is normal.  For a season you’ll need to focus and exercise discipline to accomplish every task.  You’ll need to push through and overcome the desire to quit until you’ve gain the mastery to do it with ease, and you will.

You can do this!  If you implement these 5 keys of developing good money habits and use the resources available on this site, I promise you you will succeed.

Share a unique money habit and how you’ve used it to help you achieve a financial goal.