Opinion January 2, 2017 | 11:58 am

Resolve to replace your bad financial habits

Most people have at least one bad financialhabit. Whether it’s impulse shopping, forgetting to pay bills on time orputting off building that emergency fund, balancing what you want to do andwhat you "should" do is never easy. The new year is the perfect timeto identify potential financial weak points and replace bad habits withproductive ones.

Start by identifying your bad habits.Sometimes a bad financial habit is easy to identify. For example, there mightbe a growing stack of bills in the kitchen that you willfully ignore. Othersmay be subtler, or perhaps they’ve become so ingrained that you do them withoutthinking twice.

Not sure where to start? Looking through yourprevious months’ expenses can help you identify expensive trends or one-offpurchases that are part of a larger theme. Online or paper bank statements canmake this particularly simple. If you have a budget, you likely already compareprojected spending with actual spending on a monthly basis, if not, this mightbe a good time to start.

You might recognize a few of these common badfinancial habits in your life:

Paying bills after the due date.

Paying only the minimum required on bills.

Ignoring bills and letting them go tocollections.

Putting off saving for retirement or for arainy day.

Impulse shopping or "retailtherapy."

Not keeping track of how much debt you have.

Taking on debt to pay for something you don’tcurrently need.

Ultimately, all of these lead to spendingmore than you earn and in some cases, bad habits can have a cascading effect.

Try to figure out what’s driving yourbehavior. You might need to figure out what triggers your behavior and thereward you perceive afterward before you can change a habit. However, triggers andrewards aren’t always obvious.

For example, you might buy big-ticket itemswhen they’re on sale because you want to feel like you’re accomplishingsomething by "saving" so much. Perhaps you could foster a similarfeeling of accomplishment by investing the money in a tax-deferred retirementaccount and calculating how much it’ll be worth after years of compoundinterest.

Aim for these healthy financial habits. Whathabits should you try to adopt? Budgeting is certainly a worthy activity, butalso consider the following mix of behaviors and specific objectives that canhelp keep your finances in order.

Pay bills on time. In addition to avoidinglate-payment fees, making on-time payments is one of the most important factorsin determining your credit score.

Make paying down debt a priority. Rather thanaccruing interest, make a point to pay down debts as quickly as possible.

Build and maintain an emergency fund. Havingthree to six months’ worth of living expenses in savings can help cushion theblow from a financial or personal setback. You could start with a goal to put$1,000 aside and then build towards the full emergency fund.

Save for retirement. You can put aside apercentage of your income for retirement and invest the money within atax-advantage account, such as a 401(k) or IRA. Find a comfortable contributionamount to start with, and then try to increase it at least once during theyear.

Plan your large purchases. To help preventimpulse shopping from draining your budget, resolve to wait at least one daybefore buying anything that costs over $100 (or whatever amount makes sense foryour budget). If you know there’s a large purchase coming up, start savingearly by setting a little money aside from each paycheck.

You might consider asking others for inputduring this process. Especially if you’re having trouble identifying a badhabit or finding the motivation to change, sometimes an outside perspective canhelp.

Bottom line: Make a resolution to replaceyour bad financial habits with healthy ones this year. Start by identifying thehabits you want to change and trying to figure out the trigger and reward thatsurround the behavior. Then, try to replace that behavior with somethingpositive. After identifying and trying to change your personal financialhabits, you might want to consider the financial practices you share with aspouse or significant other.

Nathaniel Sillin directs Visa’s financialeducation programs. To follow Practical Money Skills on Twitter:www.twitter.com/PracticalMoney.

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