How to Form Better Money Habits and Stick With Them

It’s one thing to set financial goals. It’s another thing to actually meet them. When it comes to forming strong money habits––the kind that you maintain week after week, month over month, until you’re actually excited to check your balance––there are a few tricks I’ve learned that could make all the difference. 

For some background: I wasn’t always good at managing money. I wound up on Wall Street almost by accident and my first few years were predictably tough. I worked pretty much every day, ate almost every meal at my desk, staggered home around midnight, and always, always had an eye on my blackberry. Dating was impossible. Friendships were tested. Entire vacations were canceled last-minute. Eventually, I realized that everything I cared about––my family, my relationships, traveling, even my health––were suffering, so I left for a job with a better lifestyle. I also took a significant pay cut.

At first, it felt like freedom. I was in my twenties and living in New York, eager to make up for lost time. I went to dinners, took classes, traveled, and went out with my friends, telling myself that I’d earned a little fun. But you know that sinking feeling when you’re afraid to check your balance because you know it isn’t going to be great? It was weighing on me. One day, I logged on and saw that I’d spent almost my entire bonus, about $35,000 after taxes, in about three months. I had to face the fact that my new lifestyle didn’t match my new salary. If I didn’t reduce my spending, I’d have to go back into banking, and I really didn’t want to do that.

I decided to pour all my energy into mastering a budget, but relevant resources were slim. At the time, most of the books about personal finance were dense and convoluted, written by old white men whose systems for saving and spending didn’t apply to my life. The only way to make their advice meaningful was to adapt it into practices that felt clear and current. After a while, my life coach encouraged me to find an outlet to share lessons from my journey, so I started a blog called The Fiscal Femme. It’s dedicated to providing women with tools for financial success and can apply to anyone. It’s rooted in my belief that financial well-being is a key to independence. The blog has also, in a way, served as a diary. Before it evolved into a community and educational tool, it was a home for all the basic advice I needed myself.

Here are five key tricks to forming better money habits—and keeping them. 

1. Have a growth mindset: One of the first realizations I had on my journey was most of us have pretty negative narratives around money, but saving and managing money is a skill like anything else. That means we can get better at it if we work on it. Are you going to make mistakes? Of course. I still do. But rather than punishing yourself, find ways to learn from them. If there’s one thing I want you to take away from this piece, it’s that the way we talk to ourselves matters. 

2. Make a positive money mantra: Mantras are whatever we repeat to ourselves, and they can become self-fulfilling prophecies. If you repeat to yourself that you’re bad with money, your actions will reinforce that idea. So start noticing how you talk to yourself and swap negative mantras for positive ones. You don’t have to believe them at first––in fact, you probably won't. But if you believe that you can figure it out, you’ll start to fulfill a different result. My own negative mantra was always, “I’m not worth it,” which I eventually replaced with “My time is more valuable.” It might sound cheesy, but it works. When negotiating comp, for example, it tells me that my expertise is valuable. Changing your internal dialogue can be very powerful. I call a budget a “happiness allocation” because a “budget” can feel like denying myself something when, in reality, I’m saving for something I really want. Thinking about that vacation, the feeling of paying off a loan, or even the peace of mind that comes with having a plan makes the work of budgeting worth it.

3. Be realistic but optimistic: Money is emotional and often elicits an emotional response. But much like with food, going cold turkey sets us up for failure. Instead, think about your goal and the small steps it will take to achieve it. Rather than swearing off Lyft forever, ask yourself if that’s realistic. Maybe you need to get home late at night and that’s the safest way to do it. Instead of taking it off the table entirely, aim for slow improvement. Find ways to make cheaper transit more enjoyable; maybe you start a new podcast and listen to it on the subway, for example. That way, when you do have the choice, you are more likely to choose public transit. 

4. Track your progress: Even if we're making progress, our brains tend to benchmark where we’re at right now which has us feeling stagnant. It's motivating to track and celebrate little milestones along the way. I'm a big fan of money parties, which are a time to sit down and check in on your finances. Personally, I have one once a month, and I make them fun: I put on my money party playlist, I pour my favorite beverage, I get in comfy clothes, and it’s on. Digging into your finances can be scary or associated with feelings of failure, so make these occasions something you look forward to. And who knows? Maybe if you do it often enough, you’ll be pleasantly surprised with the results.

5. Reward yourself: Our brains latch onto rewards, so if we promise ourselves something fun, it's important we follow through on it. Maybe you finally paid off a loan so you book yourself a massage. Or you’ve saved half of your goal for the year, so you treat yourself to a pair of shoes. It doesn’t matter if it’s big or small, it just needs to be for you. I talk a lot about tracking our progress and learning from our mistakes; a great way to do that is to take a step back and marvel at how far we’ve come.

About Ashley:

Ashley Feinstein Gerstley, is an author, entrepreneur and Founder of The Fiscal Femme. She is on a mission to end inequality through financial well-being. She is also the creator of the 30-Day Money Cleanse program, which has helped thousands of women cultivate harmonious relationships with money and achieve their financial goals. As a trusted money expert, she has been featured by Forbes, NBC, Glamour and the New York Times, among others.