'The absolute best financial habit' you can develop, according to a certified financial planner


Stop buying coffee, don't spend so much money on ordering in — you've probably heard the common financial refrains. While advice like this can help you save money, experts say there are other underlying behavioral and mental shifts you can make that are more likely to set you up for long-term financial success.

One behavioral shift most of all: "Without a doubt, the absolute best financial habit is to 'pay yourself first,'" says Amy Shepard, a certified financial planner with Sensible Money in Scottsdale, Arizona.

Adopting that powerful habit, and the three others listed below, can help you reach your financial goals, according to certified financial planners. 

1. Pay yourself first

Getting your spending under control can take a lifetime to master. But if you're serious about building wealth, you have to learn to do it. Financial experts tell Grow that one way to kick-start the process is to pay yourself first — that is, commit to saving before you allocate what's left toward your bills and discretionary expenses.

Paying yourself first "serves as the foundation for any long-term financial success," Shepard says. "The concept of paying yourself first means to save before you spend — not the other way around."

Commit to paying yourself part of windfalls, too, including your tax refund or bonus. And aim to put aside more with every salary increase, advises Aaron Clarke, a certified financial planner with Halpern Financial in Asburn, Virginia.

Farnoosh Torabi: Making 5 changes can save you big money

Video by Courtney Stith

2. Automate savings and bills

In addition to paying yourself first, automate your savings and your payments whenever possible, experts say.

That means setting up recurring transfers to your savings, investing, and retirement accounts. Doing so removes the "pain of paying" you might feel from making individual transfers, and ensures you're regularly putting money toward your goals.

You can use autopay for bills, too, to make sure you never miss a payment.

"Regular, automated savings is a habit that is one of the best to establish —  it sticks with people through a lifetime, and yields positive long-term results," says Karen Van Voorhis, a certified financial planner and the director of financial planning for Daniel J. Galli & Associates in Norwell, Massachusetts.

3. Monitor your cash flow

Many people struggle with budgeting. But understanding where your money is going is key to make sure you don't overspend, and that you're making spending and savings decisions that are in line with your goals. 

"Figure out what you want to spend money on," says Zachary Abrams, a certified financial planner with Capital Advisors, Ltd. in Shaker Heights, Ohio. Remember that "the big expenses are ultimately what impact your bottom line," he says. Focus on reining in big monthly expenses like housing, food, and transportation, before you worry about small stuff like skipping your morning latte.

And if you plan on making a big purchase, consider how that will affect your budget, says David Haas, a certified financial planner and owner of Cereus Financial Advisors in New Jersey. That might mean figuring out how much car you can afford before you head to the dealership, for example, or accounting for surprising costs of homeownership before you buy. "This will ensure you don't overspend when the salespeople and advertising try to sway you," he says.

How reverse budgeting can relieve money stress

Video by Courtney Stith

4. Get comfortable talking about money

"Many people were raised to think it is taboo to talk about money. That mentality can get you into trouble," says Linda Rogers, a certified financial planner and founder of Planning Within Reach in San Diego, California.

Getting more comfortable talking about money can help you at work. Talking about salaries with her coworkers inspired tech worker Caitlin Boston to change jobs, get a raise and pay off her student loans, for example.

It can help at home, too: "American Ninja Warrior" contestant Morgan Wright has found that talking to his kids about money was key to teaching them personal finance. 

Couples especially stand to benefit from having regular, honest check-ins about money matters, Rogers says. "The sooner you get into the habit of having a money conversation, the more comfortable it will be to work together to meet your goals," she says.

More from Grow: