, , ,

From Small Change to Big Bucks: Resolve to Fix Your Bad Financial Habits

Woman puts coin in piggy bank: How to Change Bad Financial Habits

There are lots of ways to save money. Most, if not all of them, require some degree of steadfastness and discipline. You can resolve, for example, to hold off buying yourself any new clothing or housewares for a set period of time. You could pledge to never buying coffee or water out or tossing all your loose change into a jar. As a family, you might commit to cook and eat at home more often, or even grow and freeze your own produce.

The good news is that whatever change we commit to doesn’t have to be big to have a big impact. But that doesn’t mean it won’t be hard.

That’s because improving our financial situation requires that we change our financial habits, and reversing a habit takes time.  How much time, exactly? Well, that’s up for debate. Popular lore suggests it takes around 28 days to stick. However, a study published in 2009 by researchers at the University College London found that participants averaged 66 days—a full 3 months—to change a habit for good. Even then, their individual traits and the particular habit in question impacted how quickly they succeeded.

How To Change Your Habits

The first step to ensuring success is to set the bar low enough that you are confident you can hurdle it. Positive reinforcement is a winner’s game. As they say: nothing succeeds like success.

But even simplicity won’t ensure success unless you understand how change actually happens. This article by Oliver Burkeman in The Guardian says often we tend to think about habit change wrongly:

“We get trapped in a paradox: we want to, say, stop watching so much TV, but on the other hand, demonstrably, we also want to watch lots of TV—after all, we keep doing it—so what we really want, it seems, is to stop wanting.”

There are good reasons we make bad financial decisions, even when it’s counter to our own best interest. Unless you tackle the reason you developed the bad habit in the first place, you are likely to get stuck simply wanting to want to change.

Get to the Bottom of Bad Financial Habits

All of our habits have a function to them. In a word, they make us feel good or keep us from feeling badly. Changing a habit requires we learn what function that bad habit serves. Stress eaters, for example, have learned to use food to “stuff down” uncomfortable feelings. Learning to avoid stress eating doesn’t mean simply avoiding the cupboard. It means finding an alternative and constructive means of experiencing hard feelings. Financial habits are no different.

Maybe you feel depleted at work and have learned to find comfort in a small luxury (coffee anyone?). Maybe your should-have-could-have feelings about your financial reality make avoiding that anxiety easier than the conscious thought it would take to make change. Maybe you are exhausted and stretched to the limit and the idea of sacrificing more of your meagre resources feels insurmountable.

Whatever it is, you’re not alone. Here is a list of just some of the reasons people develop bad financial habits:

  • Self-control feels burdensome
  • Delaying gratification makes you uncomfortable
  • Your brain is wired that way
  • You can’t cope with choice and complexity
  • You can’t deal with math
  • You’re caught up in keeping up with the Joneses

Make that Change

Armed with new insight about the function behind your bad habits, you are more likely to find another way to satisfy the function that habit fulfilled. Financial coaches and financial counselors can help you plan your next steps.

While it may take you more than 66 days to see real change, if you start simple and show real conviction, you are likely to succeed. You don’t have to be perfect. In fact, research found, messing up here or there didn’t appear detrimental in the long run. If you start our strong, “it’s those early repetitions that give us the greatest boost in automaticity.”