Page 5 - Belco Connections - March 2019

Three Automatic Ways to
Create Healthy Financial Habits

A message from GreenPath Financial Wellness
It can be tough to stick to healthy financial habits, especially the ones that relate to
long-term goals. The great news is that we can make some relatively small changes that
“nudge” us along in the direction of financial wellness.
In behavioral economics, the study of how people make choices, small changes that
alter our default behavior are called “default nudges.” Automation enables us to
enforce our intentions and priorities, and creates a barrier for spending decisions that
fall outside those priorities.
Here are three ways to automate your financial life:
1. Meet your savings goals by setting up an automatic deposit for your savings

account. As legendary investor Warren Buffet puts it, “Don’t save what is left
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percentage of your income you want to put toward that goal for every pay period.
An automatic transfer puts that money into your savings account every time you
get paid, making it easier to meet your savings goals and less tempting to spend
that money on something else.
2. Simplify bill paying, save time, and avoid late fees by setting up auto-pay for
your bills. Another simple way to automate your financial life is to set up
auto-payments for your bills. If you have recurring bills that you budget for every
month (like a mobile phone bill or monthly loan payment), you can use auto-pay
to make sure those bills are always paid on time. If you have the option to choose
your payment dates, set them up shortly after your paycheck is deposited into
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Payment Plan, which helps consumers automate their monthly payments and
schedule them around payday.
3. Plan ahead and maximize your tax benefits by signing up for automatic
contributions to a retirement account. If your employer offers a retirement
plan, such as a 401 (k) or 403 (b), sign up to have your contributions
automatically deducted from your paycheck. These plans place a portion of your
pre-tax income into a retirement account, giving you a lower taxable income

(“Healthy Financial Habits” continued on page 5)

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