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11 May 2018 | Written by Daniel Dewitt

10 Habits People Make That Keep Them Financially Stable

As much as we like to think of ourselves as rational beings who make decisions in a logical manner, the truth is that we’re creatures of habit, especially when it comes to financial decisions. But that isn’t necessarily a bad thing. Like other financial habits articles we’ve posted before on this subject, as long as you cultivate the right habits, they can help you become financially stable. Here are some of the most prevalent practices financially secure individuals share.


They Understand Their Own Spending

The first step to becoming financially stable is to understand your own spending. How can you save money if you don’t know what you’re spending? No matter how much money you make, you can always adjust your lifestyle to spend more, so keeping a close watch on what you earn and what you spend is essential.

They Balance Their Financial Needs

Becoming financially stable is about finding equilibrium between the three main facets of your finances: income, spending, and savings. One approach financial experts have suggested is the 50-20-30 rule, in which 50% of your spending goes towards necessities, 20% towards savings, and the remaining 30% is considered discretionary spending.

They Think Long-Term

Short-term strategies can keep you financially stable for a while, but over time you’ll hit snags, challenges, and expenses that will trip you up. To be successful in the long-term you need to think on a larger scale, and that means establishing long-term goals and steadily saving to reach them over several years or decades.

They Keep an Emergency Fund

Part of staying stable is admitting and accepting that there are things in life you simply cannot anticipate or prepare for. Life is unpredictable, and paradoxically, the best way to manage the unpredictable is to have safeguards in place. Putting away a little money in an emergency fund each month ensures you can handle emergencies even if they happen at the most inconvenient times.


They Make Financial Dates With Themselves

One of the worst habits you can fall into is not paying attention to your finances for months at a time. And the best way to combat that is to get into the habit of making a date each month where you can sit down for an hour or so and take a comprehensive look at your finances. It doesn’t have to be a marathon session, but it does need to allow enough time to go over everything concerning your money.

They Know How to Use Loans

Loans are both one of the most powerful tools in your financial toolbox, and a huge liability if you fall into the habit of using them without thinking. Whether it be a credit card, home equity loan or an installment loan, financially stable individuals will always weigh the financial impact and possible liabilities before they borrow money.

They Don’t Eat Fast Food

Not only is fast food terrible for your health, it’s not as cheap as you’d think. Especially if you eat out every week, those receipts for french fries and burgers will pile up. Some of the richest people in the world, including Warren Buffet, brown bag their lunch, so why would you waste your money eating greasy garbage?

They Think In Specifics

Despite having such a huge impact on our lives, too often our understanding of our finances is fuzzy at best. One of the best habits you can develop is starting to think about the specifics of your finances: force yourself to think in actual dollar amounts instead of imprecise terms like “lot” or “little.”


They Set Up Auto Deposit

This is a little bit of a cheat, but most banks nowadays will let you set up auto deposit so that a portion of your paycheck each month will be automatically deposited to your savings account. Setting up auto deposit saves you the trouble of remembering each month, and removes the temptation to spend the money you should be saving for your future.

They Develop Impulse Control

Last but not least, learning to control your impulses is key to achieving financial stability. It’ll keep you from impulsively buying things you don’t need, and making decisions in the heat of the moment that will cost you in the long run.

Daniel Dewitt