Program Your Autopilot: 10 Good Money Habits and How to Form Them

They say that “old habits die hard.” However, new research shows it might not take that long to form new ones.

According to a study released in the European Journal of Social Psychology, which followed 96 participants for 12 weeks, it took participants an average of 66 days to form deeply rooted habits that stood the test of time. If you believe that research, that means the vast majority of us could truly change our lives in a little over two months.

But is it really that easy?

According to behavioral change expert Dr. Hersh Shefrin, patterns and behaviors — especially financial ones — can be changed over time if new habits are performed repeatedly. Last year, in Forbes, Shefrin offered this explanation for how habits are formed:

“It’s like digging a groove. The more you do it, the deeper the groove. And the deeper the groove, the harder it will be to get out.”

But, like anything else, new habits require personal initiative. After all, you can’t form a habit through repetition if you never get started. And sometimes, getting started is the hardest part.

10 Good Money Habits — and How to Make Them Second Nature

If you’re hoping to pick up some money habits that can improve your finances over time, this list is a good place to start:

Habit #1: Paying your bills on time

This is an excellent habit to form for a few reasons. First, it will save you from paying the unnecessary late fees that result from late payments. And second, it might save you from the higher interest rates charged to those who pay late. Since payment history can make up as much as 35% of your credit score, prompt bill payments should help increase your credit score over time.

How to form this habit: If your bills aren’t organized, it’s a lot easier to pay them late by accident. To form a healthy relationship with your bills, you could consider several strategies, including:

  • Pay bills once or twice per month. Consider paying bills on the first and the 15th of the month, depending on when they are due.
  • Set bills you worry about on autopay. Bills you are likely to forget can be set on autopay for a certain day of the month.
  • Mark due dates on your calendar. Pay bills according to their due dates by marking those dates on your calendar with other important responsibilities and events.

Habit #2: Creating a monthly budget

We’ve written about budgeting multiple times here at The Simple Dollar, including my personal favorite form of budgeting, the zero-sum budget. But any type of budget will do — as long as you use it.

Instead of thinking of your budget as a restriction on your life, try to think of it as a powerful tool — a plan for your money.

How to form this habit: If you opt for a monthly budget, you only have to create one 12 times per year. That’s probably the easiest route to go, and it’s definitely the least time consuming.

Like any other priority, mark your budgeting date and deadline on your calendar near the end of a month — or at the beginning of the next one. Then, sit down and create your monthly budget on that date.

If you want to learn more about zero-sum budgeting and making it a habit, check out How and Why to Use a Zero-Sum Budget.

Habit #3: Investing regularly and increasing contributions as you earn more

To build your nest egg over time, you need to invest on a monthly basis at the very least. In my recent post on how to get started investing, our experts suggested contributing 5% to 10% of your salary at first, and ratcheting it up from there as your income allows.

How to form this habit: If you’re using a work-sponsored 401(k) to save for retirement, setting this on autopilot is easy. All you need to do is contact your employer’s HR department and set up your retirement contributions through payroll deduction. Setting your contributions as a percentage, say 10%, will also automatically increase the amount you contribute over time as you receive promotions or cost of living raises.

If you’re stuck investing for retirement on your own, set a specific date on your calendar to sock money away. If you’re using a monthly budget, and especially a zero-sum budget, make a habit of “paying your investments” as if they were a regular bill.

Habit #4: Tracking your financial progress and net worth

How can you know where you’re going if you don’t know where you’ve been? If you want to gain a true perspective on your financial situation, it’s important to track it over time. Even though your net worth will rise and fall over time with your investments and assets, it should show a gradual upward trajectory.

How to form this habit: This part is easy. By signing up for a money management site like or Personal Capital, you can track your net worth in perpetuity for free. All you need to do to get the ball rolling is sign up and add all of your accounts once. The rest is done for you. After that, you can simply log in from time to time to see where you stand.

Habit #5: Make savings a priority

Just like investing, you have to save regularly to build up a savings buffer over time. And no matter whether you’re building an emergency fund, saving for a house, or saving for the future with no specific goal in mind, it’s consistency that will help you reach your goals.

How to form this habit: If you’ve started using a budget, utilize it to help reach your savings goals. Create a line item for “savings” and pay your own savings account as if it were a regular bill. Or, if you want to make it automatic, set your bank account up to automatically withdraw a certain dollar figure on payday or any other day that works.

Habit #6: Stay on the wagon, no matter what

When trying to create a new habit, research has shown that repetition is key. Unfortunately, the opposite is also true — failing to perform the new habit can quickly make you forget it altogether.

If you want to reach your financial goals, it’s important to keep moving full steam ahead — even if you have a bad day, experience a financial mishap, or just feel like giving up.

How to form this habit: While staying on the bandwagon can be a drag, the other tips in this post can help you build the underlying framework that will make it easier. With a monthly budget, for example, one bad day shouldn’t be enough to knock you off track for good. Meanwhile, an automatic savings and investing plan will help you keep saving no matter what.

Habit #7: Keep an eye on your credit health

Although your credit isn’t the end-all-be-all, it is an important component of your overall financial health. In order to get the best interest rates, buy a home, finance a car, or start a business, you’ll need a good credit score and credit history behind you.

How to form this habit: To keep your credit on the up and up, you’ll want to explore the habits of people with good credit and emulate them as much as you can. Those habits include things like paying your bills on time, keeping your balances as low as possible, not opening new accounts without good reason, and utilizing different types of credit. Credit Karma can also help you track your score for free, and even offers account alerts when changes are made to your score.

Habit #8: Save on daily, weekly, and monthly purchases

While having a budget is a great way to stay on track, it’s important to keep your expenses as low as possible, too. After all, usual spending can add up over time if you’re not careful, and there are ways to save on everything if you’re willing to put in the effort.

How to form this habit: Saving on everything may seem impossible, but it isn’t nearly as hard as it seems. In fact, it all starts with your small bills — groceries, gas, entertainment, and miscellaneous.

Getting in the habit of price shopping for groceries, for example, can save hundreds of dollars each month. Here are some posts full of ideas for saving on everyday food and household spending:

When it comes to your big bills like auto insurance, homeowners insurance, and renters insurance, set a date each year to shop around for the best deal. These resources can help:

Habit #9: Spending less than you earn

No matter what, the best way to get ahead is to spend less than you earn. In his post on basic rules and financial principles to live by, Trent Hamm even calls spending less than you earn the No. 1 rule of personal finance.

“Spending less than you earn frees up the money you need to make larger payments on your debts,” says Hamm. “Over time, they begin to disappear, reducing your monthly bills and giving you even more breathing room.”

How to form this habit: If you’re following the rest of the tips on this list, this habit will take care of itself. With a monthly budget, an actionable plan to save on all expenses big and small, and an automatic savings plan, you should know what you can truly afford — and have the wherewithal to create a life that fits within those bounds.

According to Hamm, some of the best ways to start spending less than you earn involve cutting your expenses:

  • Going through all of your bills and cutting out “the extras”
  • Diligently tracking your spending
  • Taking a closer look at your routines and asking if they still serve you
  • Getting a better bank
  • Finding ways to save money around your home

Habit #10: Being the CEO of your own life

In today’s complicated world, it’s easy to let life “happen to you.” It’s easy to sit back and let the chips fall where they may. But if you truly want to get ahead, you have to be proactive. You have to set yourself up for success every time; you have to be willing to do the things others just aren’t.

Becoming the CEO of your own life is as simple as owning your triumphs and your failures, and realizing that you have the power to change your future.

How to form this habit: To become the best boss you’ve ever had, a mindset change is in order. Instead of reacting to the world around you, take the bull by the horns and do whatever it takes to create a new and better future.

Following every tip in this post will put you in the position to be the best CEO you can be while improving your financial outlook beyond your wildest dreams.

But you have to act, and you have to act consistently until you are in the habit of being in control. Remember, you are the driver of your own life — and you ultimately decide where you’re going.

The Bottom Line

All of these money habits are good to implent on their own. But, combined? They can change your life for the better, and for good. But they all start with actionable change on your part. And in order to make a change, you have to want to change in the first place.

It’s easy to keep heading the wrong direction — to take the path of least resistance. But with the right attitude and the right game plan, you can begin forming the habits that will help you become rich over time.

What financial habits have you implemented in the last year? What bad habits are you trying to drop?

Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.