Five Healthy Financial Habits
Healthy finances are not built on one perfect decision or a single big win. They are built the same way physical and mental health are built: through habits practiced consistently over time.
If you want a more stable and less stressful relationship with money, these five healthy financial habits are a strong place to start.
Habit 1: Analyze Your Spending Without Judgment
The best place to start is to review what you actually spent over the last three, six, nine, or twelve months. This is something I offer to do for all of my clients. When I do it, all I’m looking at is how much you spent versus how much came in. I don’t have any interest in making you feel bad about those extra expenses that bring you joy.
Did the thought of combing through your expenses make you physically recoil? It does for most people. That means you likely carry the money script of money avoidance. This is the emotional barrier that prevents you from keeping track of your spending with any regularity.
The process is fairly simple: get a spreadsheet export of all of your expenses from your bank, sort the expenses by date, then add up each of the months. My favorite thing to do from there is to take an average of what those expenses were per month. I also like to compare the total expenses for the year with net income for the year.
This is my top habit to develop because there’s no way to know where you’re going without knowing where you’ve been. If you know what you spend on average per month, you can start to check the health of your emergency fund.
Which takes me to my next habit…
Habit 2: Replenish Your Emergency Fund
If we even have them, emergency funds often shrink slowly and unintentionally. Unless we are intentional with our emergency funds, we can suddenly find ourselves without the safety valve we need when things get rocky.
If your emergency fund has been used, rebuilding it should be a priority. For most households, three to six months of expenses held in an FDIC insured high-yield savings account is a solid target.
This habit is less about preparing for the worst and more about giving yourself options when life changes unexpectedly.
Habit 3: Keep Your Partner or Spouse Involved
Households run better when there’s transparency about money.
Even if one person manages the finances, both partners should understand the overall picture: income, savings, debt, goals, and risks. Regular conversations create clarity and reduce the chance of misalignment or resentment.
Healthy financial planning is a team effort, not a solo assignment.
Habit 4: Develop an “In Case of Emergency” Folder
If something unexpected happened tomorrow, would someone else know where to find critical information?
An “In Case of Emergency” folder should include account information, insurance policies, estate documents, and instructions for ongoing bills. It does not need to be complicated. It just needs to be accessible and up to date.
Make sure that someone you trust knows where it is and how to access it.
This habit is an act of care for the people who would have to step in during a stressful moment.
Habit 5: Push Against Your Money Scripts
Money scripts are the beliefs you carry about money, often formed early and rarely questioned. They influence decisions more than most people realize.
Pay attention to the thoughts that surface when you make financial choices. Are they based on facts or old assumptions? Are they helping you move forward or keeping you stuck?
Healthy financial habits include examining the emotional side of money.
Final Thoughts
Financial health isn’t about doing everything perfectly as much as it’s about creating systems and habits that support your life over time.
If even one of these habits feels uncomfortable, that’s often a sign it’s worth exploring. And if you want help turning these habits into a clear, repeatable plan, that is exactly the work we do at Generation Capital Management. Feel free to reach out!
John Howe-Wemett, CFP®, AEP®, MSFP
