Every year, the imaginary clock resets and sparks motivation among the masses. Most people set New Year’s resolutions in some form or another. This most commonly takes the form of goals relating to exercise, weight loss, diet changes, or money management. Unfortunately though, about 80% of people don’t follow through on the changes they wanted to make.
As someone who admittedly enjoys a good self-help book or two, I was gifted the book Atomic Habits last Christmas. I’m usually pretty critical of whether or not I think a book will make lasting change, but this one really reframed my perspective.
I encourage you to read it, but here are the 5 big ideas:
- Habits are the compound interest of self-improvement
- If you want better results, then forget about setting goals. Focus on your system instead.
- The most effective way to change your habits is to focus not on what you want to achieve, but on who you wish to become.
- The Four Laws of Behavior Change are a simple set of rules we can use to build better habits. They are (1) make it obvious, (2) make it attractive, (3) make it easy, and (4) make it satisfying.
- Environment is the invisible hand that shapes human behavior.
(Summary by Samuel Thomas Davies – to read a more in-depth summary of the book, click here.)
A couple of additional things that stuck with me from the book:
- If doing something feels too big and daunting, make it a smaller task. For instance, if you want to go for a walk in the evenings, but you’re having trouble feeling motivated to – change your goal to “putting your tennis shoes on, and stepping outside”. This might sound silly, but if you actually do this, the chances are much slimmer that you turn around and go back inside and take your shoes off. Instead, the simple next step is to lock the door behind you and go for that walk. (I used this one a lot this year, in various ways).
- “Your identity emerges out of your habits. Every action is a vote for the type of person you wish to become.” It was after reading this section of the book that I felt called out. Realizing that I’m not attached to my previous identities, and that I get a say in “who I am” based off of my actions – felt both freeing and intimidating. It inspired me to create an excel spreadsheet where I had a row for each day of the year, and about 10 columns with checkboxes. At the end of each day (that’s right, I’ve done this every day this year), I checked off what I did, and left blank what I didn’t. These were personal value goals to me based off of things that I know optimize my physical & mental health. Examples included: drinking enough water, walking my dog, exercising, taking my supplements, reading, checking in with loved ones, spending time outside, learning something new, and more. Sharing this is a dead giveaway that I’m Type A, but it really is a neat exercise that can be customized based on your own goals and personality.
Since we’re in the business of relating things to money, here are some ideas of ways that you can use the Four Laws of Behavior Change to effect change with your financial habits:
Make it obvious
- You could try setting up your financial apps to alert you when a transaction posts, give you daily account balances, etc.
- One of our past participants drew on a large poster board a visual of their debt payoff progress. They had it there as a constant reminder of what they were working towards; making it easier to say yes or no to the things that would impact that payoff goal.
Make it attractive
- Make your monthly (or weekly) budgeting or expenditure-tracking sit-down enjoyable by having a treat when you do it (maybe at your favorite coffee shop).
Make it easy
- Automate your savings. Put your bills on autopay. It’s amazing what mental energy you can free up if you aren’t trying to mentally stay on top of these things.
Make it satisfying.
- Set goals that align with your values. If you love trying new restaurants, build it into your budget! If you love traveling, save up monthly for your next trip. Whatever it is, if you can make it satisfying to be saving money each month, you’re more likely to stick with it.
Your New Year’s resolutions don’t have to be big, grandiose goals. They can be small & quiet, but when stacked together, meaningful. Each day is an opportunity to take care of yourself and to build a life that you’re content with. We hope this is a helpful resource for you to reference as you look forward to the new year ahead.