Micro Financial Habits That Can Lead to Peace of Mind In Retirement


By Louis Horkan
Reviewed by Nathan Kattner

Table Of Contents

    Creating change in our lives is never easy. Small, easily implemented steps can enable real, meaningful change over time.


    We’ve all know it can hard be to bring about big change in life. It’s down-right tough. You’ve probably made resolutions to shed a few pounds, join a gym to get in better shape, start eating heathier, learn a new language, save more…

    You get the picture. Big change is never easy. Heck, even small change can be tough. That’s the nature of life and the routines that we fall into.

    Need proof?

    Katy Milkman is an American economist and writer who knows a thing or two about bringing about personal change in our lives. She is the James G. Dinan endowed Professor at The Wharton School of the University of Pennsylvania. She has authored books and presented extensively on the subject.

    In her research she had come across a statistic that changed her own path. She shared this with National Public Radio’s (NPR) Elise Hu and Clare Lombardo in the article A Behavioral Scientist’s Advice for Changing Your Life.

    In the article she said that she had seen a statistic a decade previously that was, “Completely mind-boggling. 40-percent of premature deaths are due to behaviors that can be changed.”

    Wow – that’s a startling statistic that should grab your attention. It really demonstrates how important change can be…yet how hard it is for most of us.

    So, how do you buck the trend?

    When it comes to change, small moves are your best bet. You can think of these as micro-habits. These are small changes in your routines that are easy-to-adopt, yet are capable of having big impacts on your heath, finances and overall wellbeing over time. These are the types of changes that can stick.

    Today we examine a number of micro financial habits you can adopt and work into your life starting right away. They can make big differences prior to entering and even after you have entered retirement. They can provide tangible change that make a difference in the life you live in retirement.

    Alert: We do talk about budgets, net worth and cash flow, which may scare you a bit, but we do so to demonstrate you can take them on fearlessly and in a manner this is easily and quickly accomplished.

    First things first

    Before jumping in, which is a setup for failure, we need to put a fine point on what exactly a micro habit is so that you understand how easy these actions are to adopt. Frankly, you probably have micro habits within your regular array of routines already.

    Examples include:

    • Parking at the far end of the parking lot at work just to get in some extra steps daily or to keep your car shaded throughout the day
    • Flossing your teeth daily (hopefully)
    • Taking daily vitamins and/or supplements
    • Putting your garbage out on the curb the night before it gets picked up
    • Cutting the grass before it gets too long
    • Grabbing your wallet and keys each time you prepare to leave your house
    • Stashing a small amount of money in your car, just in case
    • Rinsing the dishes before you load them in the dishwasher
    • And more

    None of these are tough habits to adopt or maintain – chances are you already do some or even all of these things.

    Habits like these keep things organized, help maintain health, and generally make your daily life easier.

    Overall, micro habits should be things that are easy to adopt and maintain. Same holds true for micro financial habits.

    When creating micro financial habits, make sure to focus on small and easy steps versus undertaking large steps or drastic changes.

    Determine and track your net worth

    Before getting uptight or hyperventilating, we aren’t talking about becoming an accounting or financial guru.

    To be clear, this isn’t something that requires math or a financial background – things that scare many people. Nor are we talking about taking hours or days spent on creating an exhaustive balance sheet.

    No. This should be a simple accounting of what you own and what you owe. Start simple and realize you might miss some things, which you can add in at any time later.

    But do put it to paper.

    Simply list the big items you can think of off the top of your head. This should take you a half-hour at most.

    Assets probably include big items, such as your home, auto(s), savings, retirement accounts, and those gold bars in your closet you often trip over when getting ready in the morning.

    On the debt side, once again list the big items, such as a mortgage, auto loan(s) and larger personal loans that are easy to remember because you pay them monthly.

    Don’t worry about catching everything – you’ll catch more items the next month.

    The reason this becomes an easy task to add to your normal routine is that after the first time, it will take mere minutes to complete each month going forward.

    Add items you didn’t catch the first month the next time around, such as your combined credit card debt. And a rough estimated value of your furniture and personal belongings (jewelry, fine China, artwork, et. cetera) on the asset side.

    Over the course of a couple of months you’ll have filled in everything you own and owe. The difference between the two equates to your net worth.

    That’s it, pretty simple.

    The best part of this approach is the fact that you’ll always know your net worth and can then reflect on that each month, which is empowering.

    Once you do get going you’re likely to start thinking about proactive ways you can grow your net worth, which can include incorporating other micro financial habits.

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    Cash flow and budgeting

    Here’s betting many of you are thinking “duh” just about now. Thanks for telling me I need a budget or to keep track of what’s happening with my money on a regular basis.

    Well, it’s kinda important. In fact, critical. According to a recent piece by CNBC’s Greg Iacurci, People Hate Budgeting. Here’s Why — and How to Reframe It (April 2024), despite the fact people know they should use a budget, many simply don’t.

    The articles cited a 2019 poll by the Certified Financial Planning (CFP) Board that indicated that approximately 68-percent of people believed that utilizing a budget would probably help them reach their goals.

    "The poll indicated that 40-percent admitted they had never created or utilized a budget. Wow!"Despite that, the poll indicated that 40-percent admitted they had never created or utilized a budget. Wow!

    Safe to say you can’t be in that 40-percent category if you are seeking to change and improve your financial situation.

    Before continuing let’s be sure you are clear on what we are talking about with cash flow. It’s actually simple – what comes in each month (income) versus what you pay out. See, you already deal with the issue of cash flow each month, even if you didn’t realize it.

    While it is simple in concept, most people at some point run into problems with their cash flow. What’s coming in doesn’t cover the cash that’s flowing out – the bills.

    Which brings us to another huge issue for many people – budgeting. Cash flow and budgeting go hand in hand.

    A common culprit for people struggling with finances is that of failing to create a “physical” budget (they use mental accounting, which we’ll come back to shortly), and failing to account for the unexpected, such as medical events (sickness or a medical condition), life’s curveballs (e.g., a car problem, house AC stops working), and myriad other issues.

    Whatever the case, you definitely need to know what your income is and what your bills are each month. Creating a budget complete with the exact dates of when money comes in and when each bill pays out will establish your cash flow record.

    Bonus – doing so will help identify where problem might exist.

    Viola. With this simple micro financial habit added into your monthly routine, you’ll have actually created a comprehensive budget that in fact is a pretty powerful tool that helps keep your finances organized and in check.

    Just as we said when determining your net worth, getting this done simply requires putting pencil to paper. It can be accomplished in a short period of time.

    Thereafter, with you budget and cash flow record created, there’s not much to it each month other than to check both and to update when new items need to be added.

    Last word on budgeting and cash flow. When you build this into your monthly routine as a micro financial habit, avoiding pitfalls gets easier, and equally important, so does saving and investing for your future.

    Put it on paper

    We alluded to this already, but mental accounting is something important enough to circle back on.

    Mental accounting sounds like some sort of newfangled approach to personal finance, but in fact it is an old-fashioned bad habit.

    Keeping track of your spending and your budget in your head is a lazy approach that can lead to serious issues. It always leaves you wondering if you will be alright this month. Or next.

    Ever asked yourself if you remembered everything? Do any of these things sound familiar?

    • Did I account for that $500 set of new tires I’m going to need to buy next month?
    • What about that birthday gift you bought online for your niece earlier this month?
    • Can I afford to pay my Macy’s account balance this month or should I just send the minimum payment again?
    • Do I have enough right now to make that down payment on the trip or will it leave me short with other bills coming in next week?

    Mental accounting and failing to put things down on paper, such as your budget, makes day-to-day living much more difficult, and reaching for and achieving goals very hard. More importantly, this approach makes saving for the future, especially retirement, dang near impossible.

    Whether it’s firing up the computer and entering it on a spreadsheet or word document, or literally writing it out manually on paper, this is a critical micro financial habit to adapt right away if you don’t do so already.

    Write it down!

    The rest of these micro financial habits are really simple and quick to incorporate, taking almost no time and effort to implement!

    Spend some time reading financial articles each month.Spend some time reading financial articles each month

    Don’t overdo it, as your goal probably isn’t to become a financial expert. But you can pick a source you like and trust and read an article. Doing so once a month is easy and doesn’t impact your schedule, but you become more educated and informed over time. It pays off.

    Talk to people you know about financial matters

    Be it a family member, friend, co-worker or that person at the gym you run into regularly and have brief conversations with while working out, engage in financial conversations.

    Not sure how to go about doing this? Here’s some starters:

    • Neither of us are getting any younger. What are you doing to prepare for retirement?
    • It seems hard to save right now with inflation. How do you manage to do so?
    • What do you think is going on with our economy? Are you worried about a recession?
    • Where do you learn about money?
    • What are some of the reliable sources you use to get information on finances and saving?
    • Do you have a budget or just keep track of things in your head?
    • Do you use a financial advisor to help you invest or do you do it yourself?

    Keep these conversation short so as not to overwhelm the other person or yourself. You can always pick back up with them the next time you meet up.

    Invest regularly

    You'll end up at times buying more shares at a higher price, and others at a lower price.You’ve probably heard or read that it isn’t wise to try to time the market. That’s true. Trying to pick bottoms or lows is a fools game. In fact, most financial experts will tell you that you are better off in the long run investing available dollars whatever is happening in the market at any given time.

    Doing so allows you to take advantage of dollar-cost averaging. Prices go up and down over time, but buying when you have the funds available (best is monthly and having the money taken directly so you never see it, like your 401(K) plan) ensures you are investing routinely. A great habit.

    You’ll end up at times buying more shares at a higher price, and others at a lower price. But over time it often averages out and enables you to add to your positions prudently.

    Diversify and allocate

    Speaking of adding to positions, be it in your retirement accounts, employer stock, a personal trading account, land/property, gold bars, oil contracts, or any other type of assets, be sure you spread things around to keep your portfolio diversified. Don’t keep all your eggs in one basket, as the saying goes.

    And you want to allocate what you do have. Again, spread it around so you don’t have too much of this or that and are best poised to grow your assets based on shifting economic conditions and always arising opportunities.

    In this case, you definitely want to work with a planner who can help you do so, at it does require time and expertise.

    A good planner is worth the cost and can ensure your money is properly allocated and your investment portfolio is diversified, which reduces your risk and gives you the best chance for growth over the long haul.

    Wait before spending

    First up, we aren’t talking about necessary, day-to-day spending. Think more that new 80-inch flat screen that’s perfect for watching ball games.

    A good habit regarding spending outside of normal bills is implement a cooling-off period of 48 to 72 hours, or even better a week, before buying. This keeps you from engaging in impulse spending, which can be a real budget killer and can be a big impediment to saving for the long term.

    Think of ways to make money

    When you get yourself on track with a budget and know/monitor your net worth, it’s normal to get a little greedy – but in a very good way. You’ll feel satisfied when you see your net worth grow little-by-little each month.

    And you’ll probably start thinking about ways to speed things up. Bringing in some extra income is a great way to make that happen.

    Maybe you can push harder to get a salary increase if you’re still working. Or take on a side gig. How about starting a business you’ve always thought of, taking on some consulting work in your area of expertise, or getting involved with some real estate investing if you’ve never done so, et. cetera.

    You have to think about it to actually make it happen. Make it a goal and start thinking about it!

    Set and monitor goals

    We all know it’s important to set goals in life. Be they short-term, like dropping five pounds in the next month or saving an extra $100 each month, et. cetera.

    Think about your goals, values, and other things that matter consistently.Or big ones, like obtaining that advanced degree you started but never finished years ago, purchasing a vacation home or having plenty saved to retire comfortably when you turn 60.

    Think about your goals, and also your values and other things that matter consistently – each day. Doing so makes each day matter more. It keeps you focused and on track. You’ll find you have more purpose and are more motivated. Importantly, you’ll  remain connected to your money and goals in life.


    Recapping, we haven’t covered anything you don’t know here already – it’s mostly common sense. Yet many don’t do these things as part of their normal routine.

    The real issue is bringing about meaningful change. Rather than setting yourself up for failure trying to quickly bring about major change, fact is you’re better off focusing on adopting easy to implement micro financial habits that are capable of creating real change over time. Habits that can bring about improvements to your financial situation in your retirement.

    Speaking of which, do you have a retirement plan?

    If you do (either your own or one created for you), our team would be happy to review it to determine if it is capable of adequately and securely meeting your goals.

    Or we can assist you by creating a customized retirement plan capable of helping you to retire with confidence. We can build a holistic, comprehensive retirement plan addressing relevant issues, utilizing strategies that cover allocation, risk, Social Security, taxes, income, spending, healthcare, legacy, and more, customized to your family’s specific needs.

    A plan created with the goal of ensuring you can successfully live out the retirement you envision.

    If you are ready to take the next step and talk to a team of retirement planners who can advise on all your retirement needs, and who will put your interests first, Schedule a call today!


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