The Financial Habits That Actually Support Longevity, According to Experts
What you do today helps determine what tomorrow will look like. Day in and day out every little step you take makes your path, this is true whether you’re talking your career, relationships or finances. For sure, when it comes to money, chaos can come from nowhere and put you off course.
But that said, consistently doing the right things can shelter you from storms and secure your future. What financial habits are essential to your future financial health? The experts weigh in.
See saving as sacred
There’s no getting around saving, be it retirement, emergencies, a vacation, your child’s college education, or other reasons.
You know you need to save, but what are smart strategies for doing so?
- Live below your means. Saving is easier when you do. There are many cases where people with moderate or even small incomes have become millionaires. The key behavior is spending less than you bring in,” says Dean McGowan, author of Keeping Your Money: Real Advice on Wise Investing.
- Avoid temptation. Automating savings. “Pay yourself first. Put a set percentage of each paycheck into high-yield savings or money-market accounts before you see your net pay. Studies show that automatic savings can help you make better decisions and save up to 30% more each year,” says Dennis Shirshikov, an adjunct finance professor at the City University of New York.
- Your attitude determines your altitude. “Stop saving from scarcity. Saving isn’t about hoarding or fearing the worst. It’s about building energetic safety, feeling like you’re okay no matter what. Save because you love yourself, not because you’re terrified of the future. That shift alone can change your entire financial future,” says Halle Eavelyn, money coach and founder of Halle Eavelyn Enterprises.
Safeguard your future with investments
Saving is one thing, investing is another. They’re both critical to your financial health.
Investing though, has the potential for the kind of growth that can future proof your finances.
Eve Halimi, co-founder and CEO of Alinea Invest, a wealth management platform, makes it plain, “Start investing with whatever you have, even if it's just $5. The biggest mistake I see is people waiting until they have more money to start," she says. "Compound interest is most powerful when you give it time to work. If you invest $100 monthly starting at 22, you could have over $1.3 million by retirement, but wait until 32, and that drops to $540,000. The cost of waiting is hundreds of thousands of dollars.”
How to stay motivated to invest? Halimi says, “Invest in what you understand and care about. You're more likely to stick with investments that align with your values and interests. If you're passionate about clean energy, sustainable companies, or women-led businesses, start there. When your money reflects your values, you're more engaged and less likely to panic-sell during market downturns.”
Diversify your investments. “None of the brilliant, highly educated economists and analysts know when the stock market will go down or which sectors of the economy will tank, and this is precisely why you must diversify your investments across not only multiple companies but multiple industries as well,” says McGowan.
He adds that mutual funds and ETFs (Exchange Traded Funds) can provide effective diversification. Larger investors can own portfolios of individual stocks and bonds with higher levels of diversification. Smaller investors should consider investment-grade bond funds to achieve diversification, he says.
Budget today for a better tomorrow
It’s easy to fear or feel restricted by a budget. Yet, having one gives you freedom. With a budget, you know where every dollar is going. It creates a plan and empowers you to make saying yes or no easy. If a particular expense is not in the budget, it’s off the table. Create a monthly budget.
“Remember, it takes about 60-90 days to form a habit, so don’t give up on living on a budget. Practice makes progress. I encourage everyone I work with to be open-minded and flexible regarding budgeting,” says Erika Rasure, PhD, chief financial wellness advisor and client financial therapist at Beyond Finance.
Follow the 50/20/30. Allocate 50% of income to needs, 20% to savings and investments, and 30% to wants. “This approach keeps you on track financially while still letting you enjoy life. It's sustainable because it acknowledges that building wealth doesn't mean you can't spend on things that matter to you,” says Halimi.
Sticking to a budget lessens the odds that you’ll find yourself with onerous debt, which can be a destroyer of dreams, undermining your ability to save and stealing your peace of mind.
The takeaway
Think long-term. Says Halimi, “Building wealth is a marathon, not a sprint. Focus on consistency over perfection. Market downturns are temporary, but compound growth over 20-30 years is how ordinary people become millionaires. Every generation has its opportunities - yours is starting now with whatever you have today.”