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  • Writer's pictureHarry N. Stout

159- Ten Good Money Habits: Part 1

Updated: Jun 29, 2022

One of my most popular posts has been about improving your financial health with good money habits. A subscriber wrote in to ask if I could put together a list of 10 good money habits they could implement. Let me describe ten habits you should develop to make your money life in the FinancialVerse better. I will present them to you in two posts in order to respect your reading time constraints. To begin, let’s revisit what habits are and how you develop them.

What is a Habit?

According to, a habit is defined as a way of behaving that is repeated so often it no longer involves conscious thought. A good habit might be a person brushing her teeth every night before bed or walking the dog every morning before school or work. A bad habit, on the other hand, would be chronically overeating.

Developing good financial habits and overcoming bad financial habits are essential to success in the FinancialVerse. Now let’s look at some good money habits that if developed, will help make your money life better.

Good Financial Habits

Here are some examples of good money habits that you can develop with planning and focus.

1. Develop a Personal Money Mindset

A money mindset is your personal set of beliefs about money and knowledge about how it works in your life. It is the sum total of your life experiences about what you have learned about money directly and through the key influencers in your life. It drives your day-to-day decisions about money. Your money mindset impacts whether you financially succeed or fail.

Most of us have learned about money on our own. We used the trial and error approach to find our way through the world of money that I call the FinancialVerse. We received little, if any, formal education about personal finance matters. If we were lucky, our parents took the time to teach us how to manage certain aspects of our money. Many of our parents, then and now, were not taught about money and have been unable to pass on knowledge to us.

Overall, all of our money life experiences come together to create our mindset of today.

When it comes to money, we are what we think. Having a positive money mindset and making it a priority usually results in meeting or exceeding the goals you set for yourself. The first step is to become aware of how you learned what you have about money, let’s call that point A. The second step is to determine what you want from money in your current life, let’s call that point B. Getting from A to B is what you need to do. This journey is absolutely achievable if you set your mind to it and lay out the steps needed to reach your goal. I believe a series of small steps is best in making a change in our life.

2. Develop Reflective Practices

I know the moment I mention that you need to have a cash budget, about 50% of my readers want to cover their ears or write nasty things about me on social media. So, let’s look at a budget differently. It is a reflective practice that makes aware about what you are and will be earning and spending. As I have written, putting a cash budget in place changed my money life and as I have taught others about how to do it, their lives also. You have to take time to make sure you have more cash inflow than outflow and that you are saving/putting away funds for your future needs and emergencies.

Fundamentally, If you don’t know where you are going with your money, you might not get there. Implementing reflective money practices, such as having a cash budget, will enable you to understand what you are earning, spending and saving. They will help guide you to financial success.

3. Live Within Your Means

In the FinancialVerse, you can’t spend more than you make. Your outflow of cash each month should not exceed your inflow. Yet in today's consumer driven world, even tempered by the pandemic, many people find it difficult to avoid the pull of advertising and end up buying a bunch of things they don't need. This inhibits their ability to save for future goals and for some, it leads to costly credit card debt that can haunt them for months or even years afterward.

The best way to develop this habit is to implement a cash budget of some sort. Take a look at several of my posts on this subject and you will discover the numerous ways people find a comfortable budgeting system that works for them. From the most basic to the use of sophisticated apps the solutions are out there waiting for you.

Here are just two simple examples of budgeting habits you can develop:

  • Instead of making a quick run to the store to buy a few items here and there, plan out your spending. Know what you are looking to buy and the price range you are willing to pay. By having a list and sticking to it, you’ll be better at avoiding impulse buys or picking up items you don’t really need.

  • The same goes for things you buy online. It is so easy to just click on an item and have it arrive at your home in a few days. Carefully contemplate what you really need, how much you can afford to spend, and wait at least a few days before pushing that button. If it’s not an item you really need, try to wait a few days before adding it to your cart.

4. Work to Save At Least 10% of Your Pre-Tax Income

There is no magic percentage of your income that you should be saving each month in order to become wealthy or live the life you want. Most financial experts recommend saving at least 10% of your pretax income. I believe you should target to save even more because in some years you may not be able to save at all because of life events that may happen. Given today’s world of near zero interest rates and stock market volatility, you will likely need to save more than ever to reach your financial goals.

There are a number of things you can do to make saving a lifelong habit. These include taking actions such as:

  • Opening up a savings account and seeing if you can set automatic deposits from your checking account each month so you don't have to remember to transfer the money on your own.

  • Enrolling in your employer’s 401(k) plan and contributing enough to get the employer matching funds.

  • If you get a raise, earned more from your side gig than you planned, or received an unexpected work bonus, commit to putting some of it away. While you may want to enjoy some of the extra money—which is perfectly okay—allocate a percentage of this “bonus money” toward your saving goals. On a personal note, I always made sure I took 10% of these windfalls and spent them on fun items and saved the remainder. It helped keep me on track and gave me a thank you for generating the extra cash.

5. Never Stop Learning About Money

Most of us spend about ten minutes per day just reading. Not a lot in a world where things change rapidly due to new technologies and continued innovation. To be successful with money, you should look to invest two hours per week on learning about the economy and managing your money. Please read the Spend2 tab of the FinancialVerse website for ideas on where to devote time improving your money knowledge. Things change, and your knowledge of money needs to keep up.


Here are the first 5 habits in this two-part post. Developing good financial habits takes some study and practice. Remember, a habit is defined as a way of behaving that is repeated so often it no longer involves conscious thought. Many people manage their money with four or five key habits. In this two-part post I am presenting 10 habits you could adopt. Developing these habits can lead to improved financial success and security. In the FinancialVerse, practice makes perfect. Once you develop the proper mindset and improve your financial knowledge you can develop the money habits you need for success.


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Thanks again for your interest in improving your financial knowledge!

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