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Financial Habits to Make and Break in 2018

We all have habits, some good and some bad. Brushing your teeth every night? Hold onto that habit. Biting your nails? Try to nix that one.

You most likely also have financial habits, whether you’re aware of them or not. Some might be good routines you should keep up or work to improve, while others could be costing you significantly over time. Take some time this year to look into the customs you’ve formed and determine whether they’re hurting or helping your long-term goals.

Here are three bad financial habits to break in 2018 and three good ones to form:

Financial habits to break this year

Putting off saving for emergencies

Everyone needs an emergency savings account because nobody is immune to bad fortune. You can’t predict how 2018 will fare for you, and though you may try your best to stay in good health, avoid dangerous activities and try hard at work, you may wind up with unexpected expenses. Whether you get laid off, break a leg or total your car, you’ll be much better off if you’ve saved for the what-ifs of life.

If you don’t have a savings account yet, don’t worry – they’re not hard to set up. First, reach out to your bank and open an account. You might need to make an initial deposit, so have this ready. If you already have a checking account with the bank, you might be able to take the initial deposit straight from there.

Next, make sure you’re contributing to the savings account frequently. The easiest way to do this is to set up direct deposit through your employer. If this isn’t an option, it’s simple to transfer the money from your checking to your savings account yourself through the Bank Midwest mobile banking app.


Overspending because you’re failing to budget or because you’re prone to impulse purchases is a bad habit that’s likely impeding your savings efforts or keeping you back from reaching your financial goals.

How do you know if you’re overspending? Bankrate pointed out that these are the common symptoms:

  • You carry a balance on your card every month.
  • You’ve transferred a credit card balance to another card.
  • You put necessary expenses on credit cards because you don’t have enough in your checking account when the bill is due.

If this sounds like you, it’s time to assess your finances and make a budget. This might not sound like much fun, but budgets are better than bankruptcy. To start, open a spreadsheet or get a piece of blank paper. At the top, put your monthly income.

Next, calculate all your necessary expenses – housing, auto loan, food, utilities, student loans, debt payments and the like all belong here. Add up your necessary monthly costs and subtract it from your monthly income. This is what you have to work with.

If you wind up with a negative number, look for areas you can start cutting back on. Are you paying extra for a large cable package? Try slimming down your TV budget. Do you pay for cell phone data you never use? Shop around for plans that fit your lifestyle better.

Finally, determine what to do with the remainder of your monthly paycheck. Remember, a portion of it should be directed to savings.

Forgetting to pay your bills

Putting off paying your bills can cost you – literally. Late charges add up, and when you make late payments a habit, it may be reflected in your credit score. This can prevent you from obtaining loans in the future or stick you with a high interest rate.

In 2018, make late payments a thing of the past. There are three methods to help yourself pay your bills on time, every time:

1. Make a bill payment calendar. Using a physical calendar or an app on your smartphone, mark which bills are due on which days. You might also mark the days you get paid – this will help you visualize where that money is coming from and make you think twice about buying something unnecessary two days before the electric bill is due.

2. Set up bill payment alerts. Some services will let you sign up to be notified at regular intervals when your due date is a certain number of days away. You’ll get a text message, which will remind you to make the payment that day. If this isn’t available to you, make the reminders yourself. Set them up on a calendar or on your phone to alert you on the same day every month.

3. Enroll in auto payments. When you enroll in auto payments, the bill will be paid without you needing to arrange it each month. This can usually be done either through the entity you’ll be paying or through your bank’s mobile or online banking options.

If you choose the route of enrolling in auto payments, it’s important to be very diligent about keeping track of your balance. This is easily done with a mobile or online banking portal. If you get caught with too few funds in your account, you could incur extra charges.

Financial habits to make this year

Make shopping lists

Before you go to the store – any store, whether it be grocery, department or book – make a list. While you’re at home, away from all the distractions of in-store displays and ads, you’re more likely to think practically about what you need from your shopping trip. Make a list based on what you need, then stick to it while shopping.

Research major purchases

Before you buy something big – a car, a house, a boat, a refrigerator – do your research. Find out what the best model is, what you can expect of it and whether the extended warranty is really worth the price. Find out whether buying used rather than new can save you money while still providing value, or if there’s a major sale coming up that you can take advantage of. When you research major purchases, you may find surprising information that can save you a lot of money.

Read your credit card statements

Your monthly credit card statements are not exciting, but they are important. Every month, sit down with your credit card statement or bring it up online if you’ve enrolled in paperless statements and look it over. This can give you a better idea of how you’re spending your money every month, clue you into a charge you didn’t realize you were paying or point out a purchase you didn’t make. If you find erroneous charges, be sure to dispute them right away.