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We know that many of the financial habits we develop are ones we would rather not have. We understand how frustrating it is to feel like every year is a repeat of the year that went by. Too many of the people we talk with don’t know the difference between habits that are just a little painful versus ones that can set you back.

Download the Stage 2 Decision Process Infographic

Read on to find out which financial habits you should have to avoid real economic pain in your life.

One of the many keys to effectively changing your life is prioritization. Everyone has limited resources, whether those resources are time, money, or energy. Since you’re likely limited by your time and energy, it only makes sense to focus your resources on creating those financial habits that will have the most significant impact on your situation.

Try this process to focus on your most important new habit:

  1. Where are you feeling the most pain in your financial life?

    What keeps you up late at night? Is it the lack of savings? A non-existent emergency fund? Too little income to pay your bills each month? A bleak retirement future? You know what they are. You just need to take some time to identify which one pertains to you.
    • Addressing the most stressful financial challenge in your life can be a good place to start.
  2. Which new habit would have the most significant impact on your finances?

    Knowing that you need to work on your savings doesn’t necessarily highlight the optimal practice to adopt. Consider the impact each potential new habit would bring to your life.       We know that real change happens when you limit what you’re trying to change at the same time.
    • Make a list of all the potential habits you could build related to your target financial concern.
    • Prioritize your list based on the likely outcome from incorporating that habit into your life. Eliminate the bottom 80%.
    • Reexamine the 20% that remains. Visualize the impact each of the remaining possibilities will have down the road for one month, six months, 12 months, and five years down the road. How will the habit impact your life 25 years from now?
    • Choose the habit that makes the most sense after carefully considering the future. If you’re torn between 2 or more routines, think which would be the easiest to implement. Never underestimate the power of momentum. You can swing back around and pick up the other habits in the future.
  3. Seek to be average at first.

    Bring all the parts of your finances up to a moderate level before attempting to be a high achiever. The worst aspects of your financial life are causing your most significant financial discomfort.

    • In other words, eliminate consumer debt, have an emergency fund, save at least 10% of your income, have adequate insurance, and be consistently saving for retirement before worrying about purchasing a vacation home or the installation of a swimming pool.
    • If your habit doesn’t address a fundamental personal finance issue, be confident your target habit is in your best interest.
    • On a 1 to 10 scale, bring each part of your finances up to a “5” before attempting anything on a grander scale. Make sure you only work on one habit at a time.
  4. Do you have what you need to put the habit into place?

    If not, can you get what you need or start small enough that the habit is viable? If you’re 75lbs overweight and spend every evening on the couch, you’d have to start small if your desired routine was to run 10 miles each day. You’d need running shoes, too. 

    • Some financial habits might require you to gain a significant amount of knowledge or have a starting point that is currently beyond your reach.
    • Determine if the habit is possible with your available resources and expertise. Another goal might be more appropriate.

Time is a limiting factor for everyone, and there are only so many hours that can be applied to building and performing a new financial habit. Ensure you’re spending your time wisely and effectively. The most important patterns are often the least appealing. Focus on positive habits to best enhance your finances.


Changing financial habits can be hard work. It becomes much easier when you have a guide to walk at your side, helping you decide what would work best for you and your situation. Set a time to talk with us about how we can help.


If you’re not ready to talk, download our free Infographic on the Stage 2 Decision Process. You’ll learn how to make wise decisions when deciding what projects you want to work on.

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Topics: retirement, financial planning

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