Lifelong financial habits anyone can do

By the time you reached elementary school, you probably already did some good-for-you things by habit, from brushing your teeth to tying your shoes and even saying “thank you” (from time to time). 

Research backs up the later-in-life value of early habit making: Children ages 6 to 9 who were active and good eaters reported better mental health and less stress than those who did not. It stands to reason, that when it comes to managing your money and saving for goals, the earlier you can figure out what works for you, the better.  The good news is, it’s never too late to start. These financial habits can help.

Small changes make a big impact over time, and that includes creating a budget and managing your expenses so you’re always spending less than you earn. Changes that might help:

• Keep vehicles longer.
• Own a modest home.
• Research less expensive travel (driving versus flying, for example).
• Eat in more often.
• DIY when possible.

Paying for a pair of jeans you like or a new coat you need can be easy to include in a budget. But saving up for big-ticket items like a car can be harder. A lot of people need to borrow: 81% require a loan to buy a new vehicle.

So say you have debt—a car loan, a student loan. You’re making room for it in your budget, but you also want to pay it off sooner, if you can. One tip is to always pay off credit card purchases so you don’t carry that debt, and the interest that builds up with it. And then choose one of two debt-payoff options to get through those payments quickly: 

• Avalanche: pay off the highest-interest balance first, then the next highest, and so on
• Snowball: pay off the smallest balance first, then the next smallest, and so on

As you learn more about managing your debt in a way that makes sense for you, try to check your credit score once a year, too. You can help ensure that there are no outstanding debts you might have lost track of. Learn how to review your credit report.

Many people who’ve accelerated retirement savings put away about 15% of their income. Sounds like a lot, right? You don’t have to get there immediately. Instead, get there by saving as soon as you can—with your first job if it offers a 401(k), and individual retirement account (IRA) if you’re saving on your own—and adding to it gradually, over the years. These three strategies may help you get to that goal.

• Get the (free) money. Save enough to receive the maximum employer match in your retirement plan if offered.
• Increase your retirement savings, at least by 1%, each year or when you receive a raise.
• Check your progress yearly. 
• Rebalance your funds if needed. 
• Consider consolidating if you have previous savings that you can roll into one account.

“One way to look at it is to treat saving for your future like another bill you pay each month,” says Heather Winston, financial professional and product director in retirement and income solutions at Principal^®. “Automatic withdrawals from your paycheck to your retirement account allow you to pay your future self, first.”

Need help rolling over an account? Use these rollover steps to get started.

Would a $500 expense throw off your budget in a big way? It would for over 40% of Americans.

A good goal to build toward is having 3 to 6 months of income that you reserve for an emergency fund. You can also look to your budget and build up to an amount that makes sense for you. But just starting with something—even $100 a month—helps create that savings habit. Then, add to it gradually as you’re able to.

Those early, easy habits can help you lean into learning about how to achieve bigger, long-term financial goals. Do you want to own a second home, for example? Take big yearly family trips? Retire early? There are lots of ways for you to build on your skills, from personal finance books and articles to working with a financial professional. (You went from teeth brushing to living on your own, after all.) The people who reach their biggest financial goals aren't just savers—they're lifelong learners who stay curious about making their money work harder for them