Four financial habits to get your finances in order, according to experts

Author: Ivana Pino

Source: Fortune

Building lasting wealth and getting your finances in order doesn’t happen overnight. It takes time to create consistent, positive habits that snowball into long-term financial stability and wealth. 

“When it comes to improving your financial situation, the first step is to have a clear vision of your goals and what your ideal financial future looks like,” says financial advisor Philip Gibson. “Once you have a sense of your objectives, you can start taking action to make them a reality.” 

Once you know what you're working toward, you'll need to determine whether your financial decisions are helping or hurting your long-term future. What smart habits will help you get closer to hitting your money milestones? We asked the pros. 

4 smart money habits to set you up for a strong financial future

The tactics you use to improve your financial health and reach goals may not be what works for everyone—and that’s okay. What matters is that you consistently work to create healthy habits that will help you avoid financial pitfalls like impulsive spending and unmanageable debt spirals.

Keep a running list of your financial goals

Think of this like your financial vision board. Keeping an outline of your immediate and long-term financial goals can keep you motivated and regularly remind you what you’re working toward, even if it feels far away. 

“It's best to come up with short- , mid- and long-term financial goals. Short-term goals, for example, would likely take about a year to achieve. They could include buying a car, going on vacation or paying off nominal debt,” says Evan Potash, a wealth management advisor. “Mid-term goals might take up to five years. They could include saving for a down payment on a house, paying down student loans or saving for home improvements. And long-term goals would likely take more than five years. They could include paying for a child's college education, saving for retirement or leaving a legacy to your family.”

Have a routine financial check up 

You’ve likely heard the “apple a day” adage as it relates to your physical health; the same logic applies here. Routinely auditing your finances by checking in on your debt repayment progress, major credit score changes or credit report updates is helpful. You should also review any changes in your spending that weren’t in-line with your budget.

This is a time to call yourself out, and determine if behaviors are helping or hurting. Being honest with yourself can help you figure out necessary adjustments. 

“To maintain a comprehensive overview of your finances, it's important to conduct regular audits. At a minimum you should conduct a financial audit annually. Some people may benefit from conducting audits monthly or quarterly,” says Gibson. “If you're new to setting goals and creating a budget, it's a good idea to start with a monthly schedule until you establish a solid process and become more comfortable.” 

Implement a budgeting system that works for you 

Another key way to ensure that you keep your finances in order is to create and maintain a budget. 

A budget is a system that allows you to plan for your income and expenses over the course of a set period of time.  If you’ve never had a budget or are of the mind that budgets are limiting, it’s important to remember that budgets don’t prohibit spending, they make a plan for each of your dollars that leaves room for you to spend money on what’s most important to you. 

Creating and sticking to a budget can be a challenge, but it can give you a better understanding of how your income is being used and if you could be using it more efficiently to reach your goals. There’s no “right” way to budget. The “best” budgeting method will ultimately be the one that aligns with your spending, saving, and investing style. The key is to find a strategy you think you can stick to in the long run. 

A few popular strategies include:  

  • 50/20/30 method: This budgeting method sets aside a percentage of your income for three major spending categories. You should spend 50% of your after-tax income on must-haves, 30% on wants, and 20% on savings and paying down debt. 
  • Pay-yourself-first budget: A pay-yourself-first budget (sometimes called a reverse budget) prioritizes goal-based saving categories like retirement and investments before tackling short-term expenses. 
  • Zero-based budget: A budgeting method that allocates every dollar toward a line-item in your budget. The goal of this strategy is to have your total income, minus your expenses, equal zero.  

And once you’ve implemented a budgeting strategy, stay consistent. Check in with yourself and your budget to decide if your strategy is working for you or if you need to adjust. 

“Always track your budget and see if there are ways of cutting some non-essential discretionary expenses. For example, can you make lunch at home and bring it to work? Are you paying for a gym membership you haven’t used in 3 months? Maybe start doing workouts at home or jog with friends,” says Potash. “Take a look at whether you really need all those streaming services you got during the pandemic. Can you invite friends over for dinner and a movie night at home instead of going out to eat? Are you paying for things you can do yourself, such as washing your car?” 

Take the guesswork out of managing your finances—don’t be afraid to work with a pro 

Sometimes, you need a pro to help you make sense of your finances, set goals, and keep you accountable. Meeting with a financial advisor early on in your income-earning years can help you determine what you’re working toward, if your financial habits are conducive to those long-term goals, and where you need to make adjustments. 

Perhaps you’re struggling with debt or you aren’t sure where or how to start investing. Meeting with a financial planner can help answer some of your most important questions, create a plan that accounts for all of your financial objectives, and adjust the plan as your financial situation changes over time. 

“Seek professional help. If you're struggling with debt, you might consider reaching out to a credit counseling service for support. If you are not sure how much and where to invest your money, reach out to a financial planner,” says Gibson. “To achieve long-term financial stability, it's also important to invest your money wisely. A financial planner can offer expert guidance on building a diversified investment portfolio that aligns with your goals and risk tolerance.” 

The takeaway 

The everyday choices you make as it relates to your money are what contribute to your long-term financial health, wealth, and stability. That’s why it’s important to build positive money habits that work for you, not against you, and help you get a little closer to your financial goals.


This article was written by Ivana Pino from Fortune and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to