15 Good Money Habits To Turn Your Finances Around

By Zach Buchenau

Last Updated: February 4, 2021

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Good money habits to help improve your finances | Be The Budget

When it comes to personal finance, every decision you make, reinforces a financial habit. The question is, are you reinforcing good money habits, or bad money habits?

In this post, I’m going to cover 15 good money habits that will help you improve your financial situation.

Let’s get started.

#1 – Get Out Of Debt, and Stay That Way

Did you know that, on average, households with credit cards carry over $8,000 in credit card debt? (source)

When I read that statistic, my jaw dropped. I mean, if $8,000 is the average, that means that a significant portion of those people carry more debt than that. And, we’re only talking about credit card debt. So, out of curiosity, I wanted to calculate the payoff time for that amount of credit card debt with varying monthly payments. You can view the results below.

Payoff  Timeline For $8,000 Of Credit Card Debt With A 21% Annual Interest Rate

  • $150/month = 157 months
  • $200/month = 70 months
  • $250/month = 48 months
  • $300/month = 37 months
  • $350/month = 30 months
  • $400/month = 25 months
  • $450/month = 22 months
  • $500/month = 19 months

I don’t know about you, but paying off credit card debt for 157 months sounds like a pretty painful nightmare.  So if you want to improve your financial situation, get out of debt, and make it a habit to stay out of debt.

#2 – Live On Less Than You Make

Living within your means is a pretty straight-forward concept: if you want to have money, just don’t spend it all. So why is this simple concept often so hard to carry out?

The answer is just as simple; impatience and envy.

I’ll admit, at times, it’s hard not to covet all the fancy cars, big homes, and expensive clothes that other people own. And, when you live in an apartment, driving a 10 year old car, and go to work in a $25 pair of slacks that you bought on clearance, it gets even harder.

But paying $500 in car payments every month is worse. Owing money to credit card companies that are charging you 20% interest, is worse. Drowning in mortgage debt, because you were impatient, and bought a house much bigger than necessary, is worse.

If you make patience and contentment your focus, and avoid the temptation to live beyond your means, your finances will always be extremely healthy.

Don’t spend your life trying to keep up with the Jones’. They are in debt up to their eyeballs, and you don’t want that.

Living on less than you make is a badge of honor and humility. Wear it proudly by making it a habit.

Side note: when I say contentment, I am talking about being grateful for the life you are able to live, while spending less than you make. That does not mean you should stop trying to build a better life, career, and income for you and your family. Contentment and laziness are not synonymous. Be grateful in your current circumstances, but continually strive to make them better.

15 good money habits to turn your finances around

#3 – Don’t Fall For Sales

Buying something that’s on sale, does not save you money. It just means that you bought something at a discounted price.

This idea that you are saving money by spending money is what I refer to as “falling for sale trickery” — and most of us are guilty of it. The worst part, is that it usually manifests in the form of frugality. Let me explain.

You have fallen for sale trickery if:

  • You have ever purchased something you didn’t need, just because it was on sale.
  • You have ever opted to spend more money on an excess of groceries at a wholesale store, than you would have buying the right amount of groceries at a retail store, just because the per-unit price was better.
  • If you have ever said something along the lines of, “I saved $30 on a great new pair of shoes today.”

I am all for living frugally, but if you want to improve your finances, you can’t keep thinking you are saving money when you are actually spending it. Using coupons to make purchases, and finding good discounts, to help you stay within your budget is a beautiful thing. Just be sure when you purchase something on sale, it is for the right reason; not because of the sale itself.

Otherwise, you are just spending money frivolously — which is a very bad habit.

#4 – Mind Your Bank Account

The success of any financial habit can be measured by one thing — money. So, if you don’t know exactly how much of it you have, everything becomes cloudy.

How much money can you spend? How long will it take you to pay down your debt? How much money can you put into savings this month?

Without a number, these questions have no answer.

Money is not a ‘ballpark it’ kind of game. It is an exact game of dollars and sense. If you don’t know the exact amount of money you have to work with at any one time, you are making the path to your financial goals much more difficult than it has to be.

Money is too hard to earn for you to neglect it once it’s in your possession. Tend to it consistently, and know your numbers. You will thank yourself later for getting in the habit of minding your bank account.

#5 – Get A Better Savings Account

You know what’s an insult? A bank account that earns .01% interest annually that someone had the audacity to label as “high-yield.”

Not to mention the fact that for the last few years the U.S. inflation rate has hovered around 2%. Therefore, any money that you have sitting in a bank account that earns less than that, is actually shrinking.

At that rate, if you have $10,000 sitting in a savings account that only earns .01% interest, the value of your money will decrease by almost $200 over the next 12 months.

If you’re putting money into savings each month — and I really hope you are — you should be putting it in a money market account, or a savings account that earns you at least the rate of inflation.

#6 – Invest For Retirement

Investing in retirement, means you are putting your money to work, so that one day you won’t have to.

Let me put it this way, if you built up $5 million for retirement, and your annual rate of return was 8%, you would be making $400,000(pre-tax) every year on the interest of your investments alone. That’s some pretty sweet cash!

3 images about investing for retirement | Good Money Habits | Be The Budget

But, investing can be one of the most intimidating aspects of personal finance. So, if you aren’t in the habit, and maybe even a little nervous, here are a couple basic tips to get started investing.

  • Invest in your employer-offered retirement plan. This is the easiest way to invest, because the money is automatically pulled out of your paycheck. You should definitely take advantage of this option if your employer offers a match on any of the money you put in there.
  • Invest in a Roth IRA. No matter if your employer offers a Roth IRA or not, you should be investing in one. Why? Because in a Roth IRA, your money will grow, tax-free. That way, you won’t owe the government any money when you reach retirement age and decide to start taking the money out.

So, if you aren’t currently investing any of your money for retirement, it is time to get in the habit.

#7 – Stay Away From ‘Affordable Payments’

This one might fit within the ‘staying out of debt’ habit, but I think it is important enough to call out specifically. If you hear someone say the words ‘affordable payments,’ or something similar, like, ‘low monthly payments,’ run the other way.

This is the sneakiest sales tactic to get you into debt, and now that you are aware of it, you will see it everywhere. From car leases, to big homes, to things as small as a new pair of shoes, you are sneakily being sold on debt, disguised as affordable payments.

For something to truly be affordable, it means you must be able to pay for it in full. If you can’t, then don’t buy it. Period.

#8 – Start A Gift And Party Fund

Wouldn’t it be awesome if, every year, you had enough money saved up to cover birthday gifts, Christmas gifts, holiday parties, and any other celebration expenses that came your way? Well, this is exactly why you need to get in the habit of putting money into a Gift and Party Fund.

Katie and I originally called this our Christmas Fund, but along the way, we realized something — birthdays happen every year too. And guess what, there will inevitably be a couple other parties and celebrations throughout the year, and we should be saving for those as well.

Every month, you should be stuffing a little money away for these types of events. No longer will you celebrate Christmas in December, but pay for it in January. No longer will you be financially overwhelmed by all the birthday gifts you need to buy. No longer will you sweat at the thought of putting $20 into a pool for a co-worker’s retirement party. You have been preparing for them every month, and you can just pull the money from your Gift and Party Fund.

#9 – Build Up An Emergency Fund

Do you know what is going to happen at some point in you life? A surprise emergency expense. And when that moment comes, the last thing you’ll want to be worry about, is how to pay for it.

If you want to improve your financial situation, and set yourself up for success, you need an emergency fund big enough to pay at least 3 months of expenses; preferably 6. No exceptions.

This is the real world, and it is full of things like job loss, medical expenses, and family emergencies. And in most cases, there is nothing you can do to prevent them. But you should prepare for them financially.

Don’t be the person saying, “I never thought it would happen to me.”

Instead, be the person saying, “Thank goodness I was prepared.”

It is ok for an emergency to surprise you emotionally, but there is no reason it should surprise you financially. Go set up another money market account, and start building an emergency fund.

#10 – Say ‘No’ To Yourself

Nobody can sell you something as easily as you can sell it to yourself. You know your wants, your dreams, and your pain points. And you know exactly how to twist them into a convincing argument for why you should say yes.

But, one of the best financial habits you can adopt, is saying ‘no’ to yourself.

“No, I will not take out a loan to buy this car. “

“No, I will not use a credit card to make this purchase.”

“No, I am not going to buy this pair of shoes today.”

But saying no to yourself is one of the hardest habits to develop. So to make it easier, we recommend you start with these 3 guidelines:

  • If it involves taking on debt, you say no every time. Every… Time…
  • If you want to purchase something online, put it in the shopping cart, and wait one week to buy it. Chances are, you will find something better, or lose interest entirely.
  • If you want to purchase something in-store, put it on hold for 24 hours and leave. If you force yourself to take a full day to assess the purchase with a level head, you are much more likely to say no. Plus, having to drive all the way back to the store makes saying yes much more inconvenient than saying no.

If you implement these 3 guidelines, your inner salesperson will lose power. And once you’ve removed that power, you will start to see amazing things happen with your money.

#11 – Set Financial Goals

If you don’t set financial goals, then what exactly are you working toward? Additionally, how do you plan on tracking your progress?

Getting in the habit of setting financial goals is one of the most important things you can do in personal finance. And it is one of the key money habits of the wealthy.

But remember, money is not a ‘ballpark it’ kind of game. Setting a goal like, “I want to get rich,” is not a good goal. I am all for you becoming wealthy, but there is no way to measure your success and progress with a goal like that.

Instead, if you set a goal of saving $10 million for retirement before you turn 60, you can work backwards to determine exactly how much money you need to invest every month, and the rate of return you need to consistently achieve. Then, you can track your progress along the way, and make adjustments to ensure you get there.

Seth Godin said, “…the people who get things done, who lead, who grow and who make an impact — those people have goals.”

If you want to lead, grow, and make an impact in your personal finances, get in the habit of setting goals.

#12 – Save Before You Spend

Graphic showing saving before spending | Good Money Habits | Be The Budget

As humans, we have a natural tendency to consume what’s available to us. Whether we have a lot of money, or a little, our spending will rise and shrink to meet our supply.

This is why it is important to get in the habit of putting money into savings, before you spend any of it. It might seem backwards, but by restricting your supply of spending money, you are protecting your financial future from the beast of over consumption.

So, if your natural human tendency is to live off of what’s available to you, you might as well make it work to your advantage. Restrict your supply, and live off of what’s left.

Get in the good financial habit of saving before you spend.

#13 – Plan Your Meals

I am convinced that spending money at restaurants is the sneakiest — and easiest — way to blow through money. Therefore, one of the best money habits you can adopt, is planning and cooking your meals, instead of dining out.

The first month Katie and I started doing this, we decreased the amount of money we were spending on food by over $500. And, it wasn’t like we were indulging in fancy dinners and expensive bottles of wine. We were just averaging a combined $35 per day on lunch and dinner. Which over the course of a month, adds up to $1,050.

Now, we make dinners that are big enough to provide leftovers for lunch the next day, and we plan them out to fit within our budget. It may take a little more time and effort than stopping by Chipotle on our way home from work, but it is well worth the difference of $6,000 every year.

To put this into perspective, an all-inclusive, all-you-can-eat, week long trip to the Bahamas will run you about $6,000. Try not to think about that the next time you are standing in line at Noodles & Company.

#14 – Find Extra Ways to Make Money

It seems like everywhere you turn these days, people are talking about their side-hustle, and I absolutely love it!

That kind of, entrepreneurial “I want to get out there and earn more money” attitude, is what pops me out of bed in the morning, and I’m not ashamed to say it.

For you, this might mean starting a business, or getting a second job. Or maybe, it just means finding new ways to make extra money at your current job. Whichever route you take to make a little extra money, it will make a big difference in your finances.

So, get out there and work on your side hustle! It is one of the best money habits you can adopt.

#15 – Start Budgeting

I can’t create a list of good financial habits without bringing up budgeting at least once. This is Be The Budget after all. So here I go… if you aren’t in the habit of budgeting, it is time to start.

A detailed budget is critical to every good financial habit, because it is the control center for all your financial decisions. It is your plan, your progress tracker, and your success-meter. Without it, you are operating in the financial dark.

If you aren’t on a budget, go check out our post: The 10 Steps Of Budgeting.

It will help you get started, and set you up for massive success.

With a good budget, I am confident that you can achieve every one of your financial goals. So what are you waiting for? Get in the habit of budgeting.


The success of your financial life, really just comes down to one thing: your money habits. Are they good or bad? Are they setting you up for success, or taking you down a bad financial road?

No matter what, there is always room for improvement.

And the good news is, you aren’t stuck with your current financial situation. You have the choice and the power to change your money habits forever.

All you have to do, is decide.

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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  1. Great blog post BTB! Thanks for not suguar-coating the truth about good financial habits and the false allure of debt!

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