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Understanding and Conquering the Harmful Behaviors that Affect Financial Wellness

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Being financially literate means that you have a good grasp on your finances and have positive financial habits.

Maybe you 

  •  contribute to your retirement savings accounts regularly, 
  • keep an emergency savings fund on hand and 
  • work hard to pay down debt because you understand the consequences of accruing interest.

However, there are some common behaviors that may seem small but can significantly impact financial wellness over your lifetime. From avoiding opening a bill to splurging on a night out, most of us are guilty of a few unproductive financial habits.

Here are some ways you can identify your own costly hang-ups and work through them to create a strong foundation of positive financial decision-making now and through retirement.

Get Out of the Victim Mentality about Debt

If you keep telling yourself you’ll never get out of debt, it can make it much harder to do so. Convincing yourself that the task is impossible likely means you’ll put less effort into trying to do anything about it.

Plan for the Future

The earlier you start saving, the harder your money will work for you in preparing for retirement. It can be tough to think (or care) about retirement in your 20s and 30s, but putting a small but consistent amount into your retirement savings every month during your early adult years could mean thousands more you’ll have to withdraw in your 60s and 70s.

Prioritize in Alignment with Your Goals 

One of the hardest things to do when it comes to improving financial wellness is to strike a balance between what you need/want now and the financial security of your future. When you’ve got your own retirement to think about, aging parents and kids headed off to college, how do you know what to spend and where?

Prioritizing your finances properly is easier with the help of a knowledgeable financial advisor who can help you stay focused and organized.

Develop a Distribution Strategy

Saving enough for retirement is only half the battle. The other half? Distributing your retirement income in an effective and tax-efficient way. Heading toward retirement with no distribution strategy in place could create unnecessary tax burdens and financial distress. Again, a financial professional can help here.

Changing Counterproductive Behaviors

Conquering bad (or unproductive) financial behaviors takes persistence and self-discipline. There’s no quick fix, and you should expect change to be gradual.

Here are a few tips for conquering behaviors that may be affecting your financial wellness:

Be Mindful of Your Spending

With online shopping and contactless pay, buying is easier than ever. This, unfortunately, can make it easy to be impulsive and unintentional with your spending. Before making a purchase, take a step back and determine whether or not this buy is in line with your greater financial goals.

Don’t Let Financial Paperwork Pile Up

Avoiding a bill or bank statement doesn’t make it go away, but it does increase the chance of incurring late fees and penalties. If you haven’t already, organize your statements and other financial paperwork. Work on conquering any anxiety you may have surrounding unpaid bills or bank balances by taking these tasks one small step at a time, with rewards for accomplishing them.

Create an Emergency Fund

By creating and contributing to a savings account regularly, you can avoid future headaches and financial worries. Adding to your savings account should be a top priority in your monthly budget.

Make a To-Do List

There’s almost always something you could be working on when it comes to boosting your financial wellness: 

1.    reviewing insurance coverage, 

2.    updating your will, 

3.    outlining future goals, etc.

The list can continue indefinitely. If it feels overwhelming, start writing down everything on your financial to-do list. From there, prioritize tasks that should be taken care of now and make a game plan for those you can work on later. 

Breaking it down and crossing one thing off your list at a time can help make financial wellness much more manageable.

Finding financial wellness is a constant work in progress, but identifying your own areas for improvement and implementing small changes can yield impressive results.

It’s important to ask your financial advisor for help as well. Tell them what behaviors you’d like to break, and they can help determine the most effective way to do so.

This content is developed from sources believed to be providing accurate information, and provided by Kelly Financial Planning. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.