10 Steps to Building Positive Money Habits for 2024

By Jackie Lam, AFC®
Published on: 11/21/2023

When January rolls around, you put a laser focus on your New Year's resolutions. You're motivated and driven, and the mantra "You got this" blares in your head on repeat. Oh, how quickly we fall.

If you've found your New Year's resolution to fall by the wayside, you're not alone. While many Americans make resolutions involving improving their finances, sadly 80% of folks abandon their resolutions by February, and only 8% stick with them throughout the year.

So, how can people build positive habits in the long run? Let's look at some steps you can take to improve financial patterns:

1. Journal about your “why”

Before you jump into the practicalities of money, do a holistic assessment of your financial habits and behaviors. This includes your emotions around finances. It also means understanding your money narrative, story, and belief systems about the mighty dollar. Determining the "why" behind your financial habits can help you slowly change them.

Start by jotting down your thoughts in a journal. Journaling offers a safe, private space to express your money woes, frustrations, concerns, hopes, and dreams. Ask yourself: What might be getting in the way of achieving financial peace of mind?

For instance, maybe the scarcity mentality—that you'll never have enough—is the root of the issue. Or perhaps you're suffering from debt fatigue, and indulge in impulse buys to relieve some of the stress. Or it could be chalked up to the fact that you want to help family members who are in trouble, but doing so could clash with making headway on your debt payments.

2. Pinpoint your financial goals

What are you building toward? You may be a home builder or a family builder. Or perhaps you're more of a future builder or business builder.

Start by clustering your financial priorities around your ultimate goals. For instance, if you're a business builder, your short-term financial goal is to save $5,000 to put toward your side gig, and your long-term goal is to go full-time with your venture.

3. Build emotional resilience

Now that you've done the work on understanding your emotions behind your financial decisions and have a clearer idea of your goals, you can build positive financial habits by developing emotional resilience, such as building up your tolerance for discomfort, stress, and anxiety around your finances.

Often, it's not that we're lazy or prone to procrastination; we tend to avoid looking at our finances and taking steps in the positive direction. Instead, it's because examining our money situation can cause so much anxiety. To work through it, commit to reviewing your bank statements for five minutes. Then, work your way to ten minutes, and so forth.

4. Create a budget that works for you

A budget is there to help you stay aware of exactly where your money is going. It can help you identify "money leaks," and patch them up. There are a lot of different budgets out there, and the key is to land on one that works for you.

To start, here are a few popular budgeting methods to try out:

50/30/20 rule. With this method, 50% of your take-home income is put toward needs (i.e., bills, recurring expenses, paying down debt), 30% toward wants, and 20% toward savings.

Zero-sum budget. Every dollar is assigned a "job." That way, no dollar goes unnoticed or is spent, saved, or donated.

Guilt-free budget. This is where you "pay yourself first" by tucking a bit into savings. Then, after your expenses are accounted for, you can spend the rest without guilt.

Envelope method. The envelope method is a more visual way of budgeting. You divvy your money into different "envelopes" or spending categories, such as paying off debt or grocery money. This approach helps keep your spending in check. While it started as a cash-only system, you can employ the envelope method virtually, such as with a money management app.

5. Set aside an emergency fund

If you can swing it, consider setting aside an emergency fund. Don't be overwhelmed or intimidated by the idea that you must save three to six months of basic living expenses. It will take time to happen, and consider starting small. You can try automating savings.

For instance, start with $5 a week or month. It might not seem like much, but it will add up over time. Plus, you can always ramp up the amount.

6. Pay down debt

We know, paying down debt can feel like a monster task, especially when you have so much you already juggle. But if you don't make moves to pay your debt today, it can get in the way of building a sound financial future.

Start by tallying up your debts, and noting the outstanding amounts, interest rates, and due dates. Then, commit to paying as much as you reasonably can each payment cycle.

7. Pay your bills on time

Along the same lines, pay your bills on time. If you haven't already done so, set up automatic payments. That way, you won't miss a beat.

To simplify things, consider a money management app to set reminders when your bills are due. Or, to boost accountability, sync up when your bills are due with a shareable online calendar.

If you're struggling to stay on top of your payments, reach out to the utility provider, subscription company, creditor, or lender and explain your situation. Ask if you can change the payment due date to make things more manageable.

8. Start a side hustle

Taking on a side hustle can be a fun, flexible way to add some extra cash. Remember: this doesn't have to eat up all your time and energy. Look for a side hustle that generates another income stream, which equals money to put toward savings and an emergency fund.

Start by poking around for something flexible, easy, and lucrative. A side hustle that requires a different skillset or environment than your day job could be a welcome change from routine.

9. Cut back on unnecessary expenses

Remove subscriptions and recurring expenses you don't need or use anymore. This can be remediated by going toward your list of expenses and taking stock. You can also see if a less-expensive plan or current promotion exists.

Avoid making impulse purchases. Interestingly, research reveals that practicing gratitude can lead to greater feelings of contentment and abundance, which can curb impulse purchases.

Don't believe everything you see on social media. Those with "Instagram-perfect" lives may be going deep into debt. Stay grounded in your own financial reality, needs, and responsibilities. Find joy in your situation.

10. Don’t be afraid to ask for help

A great place to get financial advice includes online resources like the Consumer Finance Protection Bureau (CFPB), the FTC's Consumer.gov, Consumer Action, and Investor.gov. These sites are run by not-for-profit consumer advocacy groups or government entities and feature unbiased information from money experts. Or, you can check out our Self blog to educate yourself on finances.

Resolutions are indeed hard. But instead of thinking of them as needing them to be a continual upward path, frame them as cycles where you will inevitably lapse on occasion. The trick is to get to a place where the lapses are shorter and less intense. And don't forget to reward yourself when you hit milestones!

About the author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes, Salon.com, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

Editorial policy

Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s).

self logo
Written on November 21, 2023
Self is a venture-backed startup that helps people build credit and savings.

Self does not provide financial advice. The content on this page provides general consumer information and is not intended for legal, financial, or regulatory guidance. The content presented does not reflect the view of the Issuing Banks. Although this information may include references to third-party resources or content, Self does not endorse or guarantee the accuracy of this third-party information. Any Self product links are advertisements for Self products. Please consider the date of publishing for Self’s original content and any affiliated content to best understand their contexts.

Take control of your credit today.