When we think about Aristotle’s quote “we are what we repeatedly do” we can translate this to: our habits will determine our success. When it comes to our habits with money a lot of what we do is controlled by our sub-conscious beliefs. But the good news is that like all habits, we can replace bad financial habits with good ones. This video shows how you can change a habit in 30 days.
Good money habits include keeping a budget to track your spending, earning more than you spend, saving regularly and prioritising needs vs. wants. Other habits that are worth developing include keeping an emergency fund, saving for retirement, getting credit card savvy and adopting smarter ways to manage debt.
Popular psychological research has shown that it takes on average at least 21 days to form or change a habit. In reality the length of time it will take can vary widely depending on the type of habit and the individual and what works for one, might not work for others.
Setting out to create new habits may be easy but sustaining theses habits can often be challenging. Here are our top tips on how to form or change a new habit:
- Find your motivation. Get to know the real reason why you want to change an existing habit or make a new one. Our habits are more likely to succeed if we are doing them for internal reasons (for us personally) rather than external reasons (for someone else).
- Start small. It’s much easier to sustain a habit over the long-term if you start small and increase the frequency or practice the habit over time. If we make our habit too challenging from the outset, we’re more likely to give up.
- Be accountable. Declaring your new habit to those around you, going public with your new habit to the wider public or finding an accountability buddy will help to keep you focussed and stay on track. This video suggests you should keep your goals to yourself.
- Find support. When we’re building new habits it can help to enlist the support of friends, family or a professional partner to provide support in the form of motivation, encouragement or advice to help you stay on track.
- Make it regular. Consistency is often the key to sustaining a practice. If you can incorporate your new habit as a regular part of your daily or weekly routine, you’ll have much better chance of it sticking. It might mean creating time for your habit on the same day each week or choosing a time in the day that you’re more likely to remember to do it.
It’s important to remember that it doesn’t really matter how long it takes you to form or change a habit. What’s more important is actually committing to it and staying motivated to make a positive and lasting change.
Getting into the habit of making smart choices with your money on a consistent basis will take effort at first, but once ingrained, these habits are likely to contribute to your financial success and may be what end up making your financial goals a reality.
It could simply be reviewing what the daily coffee is really costing you.
There are also some handy tips in our article on why new year’s resolutions fail. In saying that, look at what this person has achieved through commitment.