đźHow To Build Better Daily Financial Habits In 2023(HIGHLY RECOMMENDED)
âHabits are the compound interest of self-improvement.â
Whether youâre looking to save more money, invest better, or manage your finances more effectively in 2023, it all starts with your daily habits.
As James Clear said in Atomic Habits:
âYour habits have a powerful effect on your life. They can be the difference between success and failure. They can determine whether you are healthy or unhealthy, wealthy or broke.â
To help you build better daily financial habits, weâll go over five practical habit-building methods from Atomic Habits.

Read also: 7 habits that made me a millionaire (super article)
Start Small And Forget About Perfection
Instead of trying to overhaul your entire financial life in one big swoop, focus on making consistent incremental changes to your daily routine.
As said in Atomic Habits, âYou donât need to start a new habit perfectly. You just need to start it.â
For example, if you want to save more money, you can start by saving $100 a month. Although this isnât a lot of money, it helps to build the habit of saving.
Once youâve got the practices and systems in place to save $100 per month, you can increase your savings to $150 or $200 a month.
And then increase your savings to $300 a month.
And then increase your savings goal to $500 per month, etc.
As James Clear says, âHabits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them.â
This is one of the key insights from Atomic Habits:
Small habits can turn into big habits over time.
By starting small, you build a strong foundation for your desired habits.
And the stronger this foundation, the more you can increase the âloadâ of your habits.
Read also: The psychology of money (must read)
Make Good Habits Easier (Or Automatic)
Itâs much easier to stick to a habit if itâs convenient and accessible. By making it easy to do the right thing, youâll be more likely to follow through on these good habits.
For example, if you want to save more money, you can:
Set up a system that makes it easy to track your expenses (using an app like Mint)
Create a budget thatâs simple to follow (such as 50/30/20 or Zero-Based budgeting)
Set up automatic transfers from your checking account to your savings account
And if you want to invest more, you can:
Follow a simple investing strategy (such as index fund investing)
Set up automatic investments in a 401(k) or another retirement account
By making your financial habits easier (or even automatic), you donât have to rely on Spartan levels of self-discipline to practice them.
Make Bad Habits More Difficult
Just like making good habits easier to perform, you should make bad habits more difficult to perform. The more difficult it is to practice a bad habit, the less likely you are to do it.
For example, if you have the habit of frequent online shopping, you can make it more difficult by implementing the 72-Hour Rule:
Every time you see something you want to purchase, wait 72 hours before buying it. If after 72 hours you still really want to buy the item, you can.
Most people who follow this rule find that they either completely forget about their potential purchase or realize they donât really need the item after all.
The 72-Hour Rule makes a bad financial habit more difficult because it takes the impulsiveness out of online shopping, potentially saving you hundreds of dollars per month.
Track (And Celebrate) Your Progress
Whether saving a certain amount of money, paying off a debt, or reaching a specific milestone in your net worth, itâs important to celebrate the progress youâve made.
As James Clear writes, âSmall wins can create a sense of accomplishment and make it more likely that you will continue the good behavior in the future.â
Obviously, you canât celebrate your progress if you donât track your progress. Thatâs why habit-tracking is one of the most important things to do.
Read also: 5 money habits I wished I learned earlier in life (check this out)
Keep The End Goal In Mind
Itâs important to remind yourself that your daily habits are a tool to help you reach a larger goal.
As Clear writes, âYour habits are the path to your desired outcomes.â
So rather than focusing on what youâre giving up or sacrificing, try to focus on the positive aspects of the habit youâre trying to build.
For example, rather than saying âIâm going to stop spending money on unnecessary things,â try saying âIâm going to start saving more money because I want to have more financial freedom.â
By keeping the end goal of your habits in mind, you frame your habits in a positive way instead of seeing them as something you âhave to doâ.
Contributed by Jari Roomer
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