Most people know they *should* spend less and save more, but it’s not always that simple. According to NerdWallet, 84% of people say they struggle with overspending, and nearly half use credit cards to cover purchases when they go over budget.
While building strong money habits can be tough to practice at first, they’re also some of the most rewarding when it comes to improving your financial health.
Here are the three habits to build if you’d like a big financial pay off:
1. Deflating Your Lifestyle
We often hear about lifestyle inflation: when income rises, and spending rises right along with it. A nicer car, fancier groceries, more frequent travel, and other nice things feel justified because “you earned it.” (You probably did earn it!).
The problem is that when unexpected events happen (like a layoff or medical expense), a high-cost lifestyle leaves you more vulnerable.
Even more sneaky is what is called lifestyle creep, where spending increases without you even realizing it.
That’s why one of the most powerful habits is the opposite: *consciously deflating your lifestyle.* This means choosing to spend less than you technically can afford, freeing up more money for savings, investments, or debt payoff.
Examples include:
- Shopping at discount stores instead of luxury retailers
- Cutting back on beauty or wellness treatments and doing them at home
- Reducing dining out or entertainment expenses
One way to approach this is to think of it as temporary. When you consciously deflate your lifestyle it reminds you that you’re in control. You can change your lifestyle expenses as you need to throughout life during times of high income, or hardships.
The takeaway is that deflating your lifestyle doesn’t mean deprivation. It’s a temporary, strategic tool to redirect money toward bigger financial goals.
2. Practicing Delayed Gratification
Delayed gratification with money can mean waiting to spend now in order to gain more later. It’s another habit that’s simple in theory but difficult in practice. With ads, social media, and instant online shopping all around us, it’s easy to give into “I want it now.”
But practicing delayed gratification builds discipline and frees up money for bigger priorities like emergency savings, investments, or debt payoff.
Practical ways to apply this habit include:
- Spending with intention: Ask yourself if a purchase truly adds value to your life before opening your walled or handing over your credit card.
- The 48-hour rule: Wait two days before buying to cut down on impulse purchases.
- Visualization: Picture what financial freedom would feel like to you. How nice would it feel to have six months of expenses in your emergency savings, the ability to retire early, or flexibility to change careers?
Ultimately, delayed gratification isn’t about saying “no” to everything. It’s all about aligning today’s spending with tomorrow’s goals.
Check out this video covering this topic:
3. Distinguishing Needs vs. Wants
It sounds easy: you *need* food, you *want* dessert. But in practice, this distinction is one of the trickiest areas in personal finance.
When lifestyles are built around a certain level of comfort, many “wants” start to feel like “needs.” For example, someone may *need* a car for work but *want* a luxury brand vehicle. That $10,000 or $20,000 difference (plus interest if financed) could instead fund savings, investments, or other financial priorities.
Personal finance is about trade-offs. You don’t have to eliminate all wants, but it’s worth asking:
- Is this purchase truly essential?
- What’s the opportunity cost of choosing the more expensive option?
- Could delaying or scaling back free up money for larger goals?
Learning to spot the difference between needs and wants makes it easier to prioritize financial security and long-term wealth over short-term appearances or impulses.
The Bottom Line
These three habits—deflating your lifestyle, delaying gratification, and separating needs from wants—aren’t always easy, but they can be game-changers for financial stability. They create breathing room, reduce stress, and allow money to flow toward goals that truly matter.
Personal finance is personal, and everyone’s trade-offs will look different. Even small shifts in spending habits can open the door to long-term wealth and freedom.
