10 Habits of Financially Healthy People

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By John Atkins

Sometimes it’s better to follow someone else’s lead than to lead on your own. The one area where this can’t be closer to the truth is in personal finance. 

By following a financially healthy person's example of their personal financial habits, you can figure out what works best for you and what doesn’t. 

Here are 10 habits of financially healthy people:

#1: They Track their Spending

This is the number one habit that every personal financial advisor or planner will tell you to develop. Hence it’s our number one. Tracking your spending is the only way for you to figure out when you’re spending your money, what you’re spending it on, and where you can save. With modern technology, checking your accounts has never been easier. 

Whether they use a mobile app or manually count their dollars, “Financially healthy people make it a habit to check their accounts at a consistent basis every week,” says Oraynab Jwayyed, a money management consultant based in Oklahoma City and owner of Businessinterludes.com

When you don’t know where your money is going, then it makes it difficult to follow through with this next habit that financially healthy people make. 

#2: They Budget Accordingly

After you’ve successfuly mastered the crucial habit of tracking your spending, then you can successfully budget. Find out what works for you — manual or automatic budgeting.

“They [financially successful people] create a budget and keep it. They budget what comes in and what goes out,” says Chantay Bridges, owner of LosAngelesRealEstateNow.com

But however you do it, make sure you stick with it. 

#3: They Set Limits on Spending

By budgeting accordingly, you are able to set limits on what you’re spending money on. Financially successful people are masters at setting limits on what they spend and when they spend it. 

That’s not to say they still don’t spend money on their wants, but they’ve set a limit on how much they spend on their wants.

This habit of separating wants from needs and limits how much you spend on each is crucial to develop the next habit. 

#4: They Don’t Impulse Shop

Impulse shopping gets people into the deepest money trouble. Financially healthy people have cut the habit of impulse shopping out of their lives. 

There are a number of different ways to quit impulse shopping. One of them is to try the 30-day rule. Anytime, you are about to make a big purchase, you must first wait 30-days. If after 30-days, you still need to make the big purchase, then it is worth it to make the purchase. 

Another way is to figure out how much the item is actually worth. Barry Maher, a successful entrepeneur, writer, and speaker, says that the mindset that led to him being financially succesful was passed down from his mother. “She said, ‘Before you buy anything, think of how long and how hard you had to work to earn that much money.'"

Try different strategies to see what works best for you. 

#5: They Set Measurable and Achievable Goals

After you’ve cut out the bad habit of impulse shopping and developed amazing budgeting skills then you should develop the habit of setting measurable and achievable goals. Meaning don’t set lofty, unattainable goals like by next year I plan to be a millionaire when that’s not realistic. 

Sebastien Dupéré of Dupray.com says that he encourages his employees to set goals that they can achieve. “We focus on micro goals instead of yearly ones. We set goals for a two week period. These are manageable periods of time where people can really put in a significant amount of work to reach their bi-weekly goals.”

Your financial goals can be as short or as long as you want, but make sure you can achieve them as well as measure your success. 

#6: They Stick to their Goals

Making goals is the easy part, sticking to them is a whole other ball game. By setting micro-goals instead of annual ones, you’ll be able to stick to your goals much easier. But, after you’ve met your first goal, you must keep making more. You can't just call it quits after the first inning. 

#7: They Plan Rewards in Advance

Meeting a goal requires a celebration. But it’s important to know how you’re going to celebrate before you meet your goal. Make sure that you’ve come up with some cost effective and cheap ways to reward yourself. 

#8: They Check their Credit Report

Monitoring and tracking your credit is just as important of a habit as any other on this list. Each of the three major Credit Reporting Agencies is required by law to provide you with one free credit report each year, which means you receive three free ones. 

You can also check the health of your credit by using a free credit monitoring and tracking service that Self Lender offers all of its members. 

#9: They Spend (Much) Less than They Make

To truly be financially healthy, you’ll need to spend much less than you make. By tracking your spending and budgeting, it’ll be easier for you to do this. 

Dan Artrip, a CFP, agrees that living below your means is one of the most important ways to be financially successful. He says, “As a financial advisor, I’ve seen that it doesn’t matter what you make, but rather your spending habits that can make all the difference in the world.” 

#10: They strategize

Most importantly, financially healthy and successful people strategize everything. There are no impulse decisions or overlooked ideas. Everything has been weighed out using a sort of cost-benefit analysis to determine if the financial choice is correct for the given situation.

Written on August 15, 2016

Self Lender is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@selflender.com.

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