The Power of Habit by Charles Duhigg explains that a habit loop consists of a cue, routine, and reward. For a habit to be formed, this loop gets repeated over and over again for the same action until it eventually becomes subconscious, or a habit to us. It is made clear that a habit cannot be erased completely, but rather covered up by another one. Utilizing this information can help you adopt financially responsible habits through repetition and realizing the ultimate reward.
- Set Goals
Whether it’s paying off loans, owning a home, saving up for a renovation, or affording a vacation, set goals for yourself, review them often, and share them with family and/or friends. This will help keep you more accountable and make it less likely for you to give up on these goals.
- Check Your Balances
Try to incorporate time to check your bank account balances every day. Assess how close you are to your financial goals and make sure you are on track to achieving them.
- Pay Bills Ahead of Time
Scheduling a payment is a good feature to utilize if you do not want to commit to automatic payments. Take time to schedule your bill payments ahead of the due date.
- Shop Without Your Credit Card
Credit is always a good thing to have but should be used very responsibly. Next time you go shopping, leave the credit card at home to avoid getting carried away.
- Pay More Than Just the Minimum
If you are able to do so, paying more than the minimum payment amount on your credit card bill gets you to financial relief much quicker. Better financial habits will more than likely follow suit the closer you get to being debt free.
- Replenish Emergency Fund Frequently
An emergency fund is useful for things such as job loss, health expenses, car problems, unexpected travel, and more. If you do not have an emergency fund yet, you should start one today and keep it well funded. Preparing for the unexpected will save you from stress later on.