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How to Create Better Habits

If you’re like us, beginning a new diet or starting to exercise is more challenging than we initially planned. The same is can be said about financial goals you may have. Saving for retirement, eliminating credit card debt, increasing your credit score; these are all things that take time and dedication to complete, but sometimes it’s hard to stay on track.

Business Insider released an article that showcases just how long it takes for your brain to form a habit. It takes approximately 66 days for a consistent behavior to be added to your brain’s list of automatic actions. We’re all human, so there’s no need to be perfect during your trial practice. However, by committing to your new habit for 66 days or more, you can ensure that this new behavior sticks with you well into the future.

A new habit can be as simple as remembering to take the trash out, or as complex as maintaining a specified number of calories you intake in a day. At AbbyBank we want to inspire you with some financial habits to help lead you down the path of financial success. Take a look at these three examples.

  1. Use the Envelope System: To help train your brain to only spend what you budget for, withdraw your total spending budget for the month. Then, divide it up amongst your budget categories like food, entertainment, transportation, etc. Then, stick to your dollars, and only spend what you have in the envelopes. Do not rely on credit or debit cards to spend extra. If you can successfully make this a habit, you could see a large amount of extra savings which can then be used for vacations, retirement, or other savings ventures.
  2. Pay All the Bills Before They’re Due: Many habits appear easier than they truly are. In order to process this behavior into a habit, there are several steps you’ll need to repeat each month. Add to a calendar on your phone, mobile device or desktop the beginning of every month to mark the dates bills are due and for how much. Then, as the bills arrive, structure your payments to pay one at a time, leaving an extra cushion in your account, should an unexpected expense arise. Using this recurring schedule, you can help yourself to get each expense paid before the designated due date. As a bonus, an ongoing history of on-time payments may benefit your credit score too!
  3. Save for Retirement: This one is often a habit that takes longer than 66 days because there is no immediate reward for your effort. The first step in this process to research your options. If your company offers a 401(k) and a match, that may be the first place you want to start. By automating payments from your paycheck, you can use pre or post-tax dollars to increase your savings without the temptation of spending. Then, when you save extra money with your envelope system, remember to add those surplus funds into your retirement savings account to give it an added boost.

We love the three goals listed above, but that doesn’t mean you can’t create your own unique financial habits! If you’d like to get started on a new financial behavior, stop into your nearest branch today and speak with one our personal bankers.

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