For many Americans, change is on the horizon: New research from Northwestern Mutual shows that 79 percent of people age 26 to 57 are planning at least one major life change over the next two years. The biggest roadblock to achieving them? Fifty-seven percent point to finances as the top factor that could potentially hold them back.
The good news is that the majority of those surveyed recognize the impact of financial planning: 93 percent say they believe a financial plan can help them reach their goals, and 40 percent believe that if they made their goals a priority, they could make significant progress on them within a few months.
But here’s the rub: It can be hard to make planning a priority if you feel financially stuck. Maybe you’re not saving as much as you’d like, or perhaps you don’t even know what your first step should be to get started on a goal. It’s likely not a matter of self-discipline or laziness — maybe you just haven’t found out what works for your personality.
“Sometimes, when we’re trying to make a good habit, we get frustrated because that habit won’t stick,” says Gretchen Rubin, a New York Times-bestselling author and the creator of the Four Tendencies framework, which identifies four main personality profiles and how they can shape your behavior and motivation. “When we know ourselves — and in particular, when we know our ‘Tendency’ — we can set ourselves up for success by making the choices that will work for us, as individuals.”
Financial habits for the Four Tendencies
So, what are the Four Tendencies? This personality framework is based on how we respond to expectations. According to Rubin, we all face two kinds: outer expectations (for instance, meeting a work deadline) and inner expectations (keeping a New Year’s resolution). How you respond to expectations determines your Tendency — that is, whether you’re an Upholder, Questioner, Obliger or Rebel.
We asked Rubin for a few tips on how each personality profile can start building strong financial habits.
Upholders respond readily to both outer and inner expectations. Their motto is: “Discipline is my freedom.” Upholders tend to do well with clear expectations, checklists and scheduling.
If you’re an Upholder, you might start a to-do list of all the steps you need to take to achieve your goal. For example:
- Check your budget to see how much wiggle room you have to contribute to new goals you want to set for yourself.
- Gather any financial records that can help you make money decisions.
- Make an appointment with a financial advisor.
Questioners question all expectations, and they'll meet an expectation only if they think it makes sense; that means they respond to inner expectations. Their motto is: “If you convince me why, then I’ll comply.”
Questioners respond well to reason, personalization and efficiency. They need to know why they’re doing what they’re doing, and can sometimes fall into “analysis-paralysis” — that is, when their need for perfect information makes it hard to move forward.
If you’re a Questioner, try making a list of every question you’d like answered as you get started in pursuing a financial goal, including why you might want to take this action. This can be a good conversation to continue with your advisor as they tailor a financial plan to your needs.
Obligers readily meet outer expectations to other people, but they struggle to keep their promises to themselves. Their motto is: “You can count on me, and I’m counting on you to count on me.”
The key for Obligers is to create their own outer accountability. If you’re an Obliger, find a friend who can act as an accountability partner for you, and vice versa. Check in with each other regularly on the tasks that can help you both get started on your goals.
For instance, you might say, “By the end of the week, let's look at our budgets and cancel any unused subscriptions so we can free up money for our goals.” Working with a financial advisor can also be a terrific form of accountability. Your advisor can help set timelines and checkpoints with you to see how you’re progressing on your goals.
As their name suggests, Rebels resist all expectations, outer and inner alike. They want to do what they want, how they want and when they want. Their motto is: “You can’t make me, and neither can I.” For Rebels, freedom and choice are top priorities.
If you’re a Rebel, reminding yourself of why you want to pursue your goal in the first place could help provide the motivation to start planning. For instance, you might say, “Financial planning will mean that I can travel, I can start my own business, or I can move to a new city — basically, I’ll be able to do anything I choose to.” For added inspiration, make a vision board or jot down a bucket list that can only happen if you follow through with your plan.
Working with an advisor
Whichever Tendency you have, an advisor can design a plan that is tailored to your objectives and your individual situation. Plus, they can provide whatever help you may need to stay motivated to meet your goals, whether that’s accountability, a timeline, or a rationale for the steps you need to take. Think of an advisor as a partner who can help you stay on track for what you want to accomplish, no matter where you’re starting from or where you want to go.