Small Steps to Big Savings: Introducing Financial Micro-habits

Change begins with small steps, and that’s exactly what micro-habits are. As Brianna Wiest from Forbes explains, micro-habits are small actions that can lead to big savings. According to Benjamin Hardy in the same article, micro-habits are quite like compound interest — small investments that can grow and help us down the road. Wiest’s article on Forbes include 22 micro-habits to start taking charge of, and here we highlight five.

Check your bank account daily

The first and simplest micro-habit to start — check your bank accounts, Venmo accounts, and any other account that holds your money at least weekly if not daily. While it’s not the same as budgeting, you can get a better idea of how much and where you’re spending. Maybe it doesn’t feel like you eat out that often, but once you see the charges listed in one place, you might glean a different story. Above all, checking your bank accounts ensure you know what you have which can help you make better financial decisions.

A page a day leads to greater savings

Granted, finances may not be the most riveting subject, but given how it does play a significant portion in our lives and decision making, it would be a smart investment to read up on investments and other financial planning topics. Make it a micro-habit to read a page a day out of a financial planning book or listen to podcasts on your commute, as Laura Adams from U.S. News suggests in her article.

Have systems do your savings for you

Make use of technological advancements through direct deposit and more importantly, direct depositing into savings account. Setting up the direct deposit into your savings account is a simple micro-habit that builds off of automation. If your employer gives you the option to divide your paycheck for every direct deposit, make use of that and start saving five percent, if not ten or more every paycheck. If you’re looking for ways to automate your savings, Christopher Murray from Money Under 30 offers a list with five choices, complete with pros and cons, so make sure to give it a read. The best part is once you set it up, this micro-habit can run on its own.

Quality over quantity

Not only does this micro-habit have financial benefits, it also has environmental benefits. In general, making higher quality purchases means less spending on replacements. Remember, higher quality doesn’t necessarily mean more expensive (though it usually ends up that way). To determine something’s quality, you might have to do some individual research, but it just means you’ll know more about the product you’re purchasing and be more aware of your purchases. Jordana Rowan from Surviving Twenty Something offers six arguments for buying quality over quantity, ranging from saving money on replacements to saving space and decreasing waste. For those who aren’t as convinced to go completely quality over quantity, another Money Under 30 article from Christopher Murray lists 12 products you at least should be purchasing quality over quantity.

Set a waiting period

While we’re on the subject of making purchases, set a waiting period before making your final decision regarding what you intend to buy. This can be for purchases as small as an extra phone case online or as big as purchasing a new home. Tisah Tolar’s article on Leave Debt Behind is geared toward discussing the waiting periods for large purchases, but the same reasons to wait on buying that house can also apply to smaller purchases that are not immediate needs (if you need toothpaste, don’t wait; go get the toothpaste). Trent Hamm from The Simple Dollar offers a list of ten questions to run through before swiping the credit card to ensure you’re making a useful, informed purchase.

Above all, the best micro-habit is to make maintenance a daily habit. From checking your bank account to doing chores on time, you’re able to increase the efficiency in how you go through your day. The way I look at it is if I wipe down my bathroom sink every week or so, I only have to deal with a little bit of dust. If I wait until a month or so later, though, I’m going to have to spend much more time and a bit more resources to get my bathroom counter sparkly clean. Apply micro-habits all aspects of your life to turn small, good habits into second nature.