Stash’s “Break Your Bad Financial Habits” Guide

Meeting your financial goals requires discipline. It also includes building better money habits.

Taking ownership of your financial life is one thing. Putting it all into practice can be a little more difficult.

Just like brushing your teeth or exercising, it all comes down to habit. Better money habits can be tough to build but once you nail them, they can easily become part of your everyday life.

If you’re serious about getting your finances in order and preparing for the future, here’s a simple method you can adopt and repeat. But you’ll have to break your current bad-habit cycle first.

Perhaps ideally, your paycheck-to-paycheck money habits should look something like this:

Unfortunately, this may be more representative of your relationship with money:

This is what living life from paycheck to paycheck looks like. While it may get you from meal to meal and rent payment to rent payment, it’s not the recommended way to build wealth and plan for your financial future.

With a few tweaks here and there, though, you can put yourself in a good position to reach your financial goals.

If you prefer a step-by-step breakdown, try following the steps (modify to fit your particular situation, of course) and repeat them every time you get paid.

1. Pay day!

There’s money in your bank account! Woo-hoo! Now, be smart with how you’re spending it.

2. Consult your budget.

Your budget is a financial blueprint and guide. It’s absolutely critical that you stick to it to make sure you’re staying on track with your spending. If you don’t have one, create one.

3. Contribute to your savings (i.e. emergency fund).

Aside from a budget, an emergency fund—a savings account containing at least three to six months’ worth of expenses—is your most important financial ally. If you don’t have any money saved up, this should be your top priority.

4. Contribute to your investment and retirement accounts

It’s critical that you think long-term. That means investing for the future, no matter how little you have to spare. After stocking up your emergency fund, find room in your budget to stash away what you can.

5. Cover the essentials.

Go grocery shopping, pay your rent and utilities, and knock out that phone bill. These are fixed expenses you can’t skip.

6. Pay other bills and debt.

Target your other bills, including debts. If your budget allows, pay more than the minimum payment to chisel away at outstanding balances, which will help you get out of debt faster.

7. Spoil yourself. A little bit. Maybe.

It’s okay to treat yourself, as long as you stay within your means. Your budget should even include a bit of money for fun.

8. Stick to your budget, stick to your budget, stick to your budget…

Money can get tight as you wait for your next paycheck to hit. Stay disciplined, and stick to your budget. The whole point is that you don’t find your bank account at zero, and the cupboards bare.

9. Pay day—back to the start!

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