Financial Wellness

Breaking barriers: top habits keeping customers from reaching financial goals

Personal habits play a significant role in determining success in reaching financial goals. This article explores three habits that impede customers from attaining their financial goals, shedding light on tools that financial application businesses can employ to assist their members in breaking free from these habits.

After the new year, many are starting to find their new money habits are slipping away. But why are financial goals so difficult to reach? The answer may lie in human behavior. Individual habits are hard to set consciously, and the unconsciously set ones are often the easiest and, sometimes, the least productive. Businesses who want to help customers reach financial goals, like saving, investing, donating, or responsibly making big purchases have tools at their disposal.

In this article, we dive into the top three habits keeping customers from reaching their financial goals, along with tools financial applications businesses can utilize to help.

Lacking a financial plan

A financial plan acts as a road map for goal achievement. It details a person's current financial situation and outlines goals, income, expenses, and ways to pay down debt. A well-organized plan ensures that money is being allocated efficiently.

A lack of a financial plan can make it much more challenging to achieve one's goals. A clear financial plan should have clear financial goals with a realistic timeline. It helps ensure that progress can be tracked, which will help motivate individuals to stay on track.

Several finance apps, such as KOHO, bank apps, Questrade, offer goal progression views in their app dashboards. For example, if a customer wants to save up $1,000 for a summer trip, they can set that goal, and see how much he or she has contributed and how much more is left.

Sometimes, those finance apps go even further by allowing for rounding up or other saving plans towards that goal. For example, Questrade offers roundup and cashback programs that complement members' financial goals. Members can dedicate transaction roundups towards their goal from everyday spending. Additionally, Questrade members can receive cashback rewards from select retailers, which is then forwarded towards their savings accounts, resulting in additional contributions.

Spending more and saving less

Saving money can be difficult, and poor spending habits can hurt the progress of reaching financial goals. Nearly 25% of Americans spend more than what they make. Unfortunately, this is due to the fact that essential expenses like housing and food are increasing at a faster rate than their incomes.

Putting money aside and building an emergency fund provides the foundation for financial wellness. It reduces the stress of not having enough to cover living expenses during unfortunate events. Overspending can often lead to individuals using excess debt to cover their costs and set individuals further back from their goals.

Rounding and cashback programs offered by financial applications like Questrade help their members develop positive financial habits like saving. With rounding and cashback, members have opportunities for micro-savings. For example, at the end of the month, they can save $30 on average. At the end of the year, they will have an additional $360, all without needing to change their spending habits. The best part is that members can track their rewards and savings in real-time.

Procrastinating financial planning

Time is money, and starting to plan for financial goals too late can be costly. When saving for retirement, it is never too early to start. In fact, the earlier one can start, the easier it will be to reach one's goal. However, the average age at which individuals begin to plan for retirement is 35.

One of the reasons why people tend to put off their financial goals is because they don't know where to start. Planning for goals and building the right habits to achieve those goals can be simple. But time is essential; the earlier one can start, the better.

Individuals must understand that achieving financial goals will take time, but building proper financial habits may not. Habits like saving, planning, and investing can take little time, but they can be done now and will pay dividends in the future.

Rounding is a critical tool for transforming financial behaviour and helping people build positive habits right now. It allows everyone, and especially those who are low-income or younger, to start and continue saving and investing by seamlessly creating additional saving opportunities.

How Olive encourages positive habits

As an embedded finance platform, Olive is dedicated to empowering your customers to develop positive financial habits with every purchase. Financial professionals, wealth managers, and institutions can incorporate a robust rounding and cashback program to help customers break the financial habits holding them back.

To learn more about how Olive is helping drive this transformation, visit Olive Solutions for Financial Wellness, or talk to an Olive specialist today.


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