5 Ways to Make a Money Goal a Money Habit
January 27, 2017 | Your Finances
If you’re like many of us, you started the year fired up about your New Year’s money resolutions (no more Ubers!) but may have already begun to feel your motivation flag.
According to the 2016 Money Habits & Confessions Survey by LearnVest, more than a third of Americans predict they won’t be able to keep a financial resolution in 2017. Even though 48% of people acknowledge that kicking their bad money habits would be more beneficial than kicking bad lifestyle habits (and the percentage was even higher among Millennials, at 57%), they expect they’ll only be able to stick with their money goal for an average of six weeks before throwing in the towel completely.
Those stats show just how challenging turning over a new leaf can be, particularly if your efforts revolve around your finances.
In fact, 52% of Americans surveyed believe sticking to a money resolution will be harder than giving up social media for a year, and more than a quarter believe a diet resolution would be easier to maintain.
Clearly there’s no one-size-fits-all formula that can guarantee success for a New Year’s resolution, whether you’re trying to give up your weekend Netflix binges, get in shape to hike Machu Picchu or get your Net-a-Porter addiction under control. But there is something that may help improve your chances: making the actions needed to achieve your goals so ingrained in your routine that they become, essentially, hard habits to break.
Classic behavior-change research out of University College London found that it took an average of 66 days to turn a new behavior into a habit—but if you are already losing your motivation after two weeks, how can you keep going until that habit is formed? We’ve gathered a few mind-over-money tips below that will hopefully, in time, make good financial behaviors feel like second nature.
1. Focus on the Big Picture Payoff
You’ve likely heard this advice: In order to make a big goal feel more manageable, break it down into specific mini-goals that help you benchmark your progress over time. That’s helpful, practical advice, but it’s also important not to forget what you’re ultimately trying to accomplish and connect it to what you value—otherwise, it may be harder to maintain motivation for the long haul.
That was the experience for Chris Bailey, author of “The Productivity Project: Accomplishing More by Managing Your Time, Attention, and Energy.” Bailey once set a goal to be more productive in the mornings, so he started waking up at 5:30 a.m. every day to start a daily morning routine that included exercise, breakfast and a slew of other activities, all before most people’s alarms go off.
It took a few months for his routine to become habitual, but that’s when it struck him—he actually hated it. He had less energy during the day and pretty much none by the time his friends wanted to hang out. He ultimately dropped the habit. “I made a change without thinking about how difficult it would be and how it was connected to what I actually value,” he says. “I [realized I] valued people more than reading the paper early in the morning.”
The same goes for money habits. If you decide, for instance, to save an extra $50 a month, without understanding the bigger purpose behind that habit you may start to resent any belt-tightening you might need to do. Are you doing it because you want to be covered with a well-padded emergency fund if disaster strikes? Or because you want a house with a yard that your family can grow into? Knowing the answer can help you stay focused.
“Sometimes people are in love with the idea of change, but you have to know deeply why you’re doing something—that’s the essential shift that has to happen,” Bailey says.
2. Make Your Habit a ‘Do,’ Not a ‘Don’t’
One of the reasons money goals tend to feel so difficult is because we often focus on what we shouldn’t do, `a la “I’m going to spend less!” But you can’t ingrain a habit that involves not doing something, says Art Markman, co-author of “Brain Briefs: Answers to the Most (and Least) Pressing Questions about Your Mind” and a psychology professor at the University of Texas.
“It is important to frame financial goals positively in terms of actions you perform, rather than negatively, in terms of things you’re not going to do,” he says. So for instance, instead of saying, “I’m going to shop less at the mall on the weekends,” spin that into something like, “Every weekend I’ll find a free, fun activity to do.”
3. Find a Cue That Supports Your New Habit
If you’re not even sure where to start when it comes to forming a new habit, consider identifying a cue that can help remind you to implement the behavior you’re trying to ingrain. Popularized by journalist and behavior-change author Charles Duhigg, cues can be a time of day or place, but they can also be an emotion, the presence of certain people or some other action or activity you already perform on a regular basis.
Bailey believes cues can be a good way to form a habit because there are many different ones within your environment to choose from. Say, for instance, you’re striving to get better at staying within your budget. You could choose lunch—a time that often encourages splurging—as the moment that signals when you should spend a few minutes tracking your expenses on an app. Or you could opt to check your budget online immediately after you read the news every morning. Or if you’re trying to save more, perhaps seeing when your paycheck is directly deposited is the trigger to immediately transfer $100 into your emergency fund. “The more of these cues we think about, the more likely we are to succeed at doing the habit,” Bailey says.
4. Remove Roadblocks Before They Happen
Consistency is key to forming a habit, so if you know there are obstacles that could potentially disrupt that consistency, “make a plan to overcome the obstacle,” suggests Maura Thomas, a productivity expert, author and founder of RegainYourTime.com.
For example, say you decide in 2017 that you’re going to brew coffee at home every day rather than buy an expensive cup of joe from the coffee shop. Think about what could stand in your way. If your excuse is that you always feel rushed in the morning, what can you do to remedy that? Perhaps it’s setting your alarm to wake you up five minutes earlier or using a programmable coffee maker that starts automatically. Having a strategy in place will make it easier for you to follow through on your good habits.
5. Encourage a Group Habit
Know someone who has the same financial goals as you? Enlisting an accountability partner, like a friend or relative who also wants to build better money habits, can help give you a support system, says Thomas. This may be why 74% of survey respondents say they’d be more likely to stick to a financial resolution if they talked about it with others.
Indeed, even just talking about your money behaviors on a regular basis could be the first new habit that you both try to form together. Make an appointment to check in with each other every week, whether it’s via text, FaceTime or during a walk around town.
LearnVest, Inc. is owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin.