Humans are creatures of habit. Think about your morning routine. Do you wake up, work out, have a shower, drink some coffee, maybe eat breakfast, and then head to work? Do you do that every day of the week? Or nearly? We create routines and stick to them. Many times we don’t even realize we are forming habits. Do you know why you buy a certain brand or preference a particular coffee shop? Some of it may be due to better ingredients or taste, but somewhere along the way it became habit, too. And these habits can creep into all aspects of our life, even our financial decision making. But often times, these habits don’t guarantee that people will be able to maintain their lifestyle if they don’t intervene and create new, more profitable habits. For instance, let’s say that you save or invest 10 percent of your paycheck because that’s what you were told to do. But what happens if you lose your job or a business falters? Will that saving habit have been enough to keep you going? Will you be able to maintain the lifestyle you were living before? How long can you survive without a new job or before business picks up?  Eventually things will return to normal, but the interruption in cash flow had some effects on their lifestyle. Plus, if they didn’t have adequate savings put aside, that interruption can really damage what they have built up. They’ll still have the groceries to pay for, the house to support, the kids to educate and the mortgage to pay.

The tragedy is when you have a person who’s been an executive or business owner who has lived a nice lifestyle but hasn’t saved enough because they didn’t know how much they had to save or assumed that their business or company pension would cover their retirement. Suddenly, in their mid to late fifties, they’re thrown out of work or suffer a bad patch, and all of a sudden their retirement plans evaporate.  Their spending was a habit, as was their saving, but it wasn’t necessarily the best one for them.

So often the habits we form don’t always come from informed decisions. Instead, they come from society or the way your parents did it or your friends do it, but that’s not always what’s best for you personally. Instead, you need a personalized financial plan that takes into account your own financial situation as well as how you want to live your life, both now and in the future. A plan that becomes a habit, but a habit that works in your best interest.

For more information about finding the best financial plan for you, visit tswealth.com.