In high school science, we learned things tend to continue in established patterns.
A body in motion stays in motion.
The same principle applies to personal finance.
Once we get into the habit of saving money,its easier to keep doing it.
Unfortunately, the reverse is also true.
The Habit Loop
so that change, its helpful to understand how our brains form habits.
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First, we have thetrigger.
This is what cues your brain to kick off a habit.
Stepping outside is the trigger for a daily coffee purchase.
Next comes theroutine, the habit itself.
In this example, the routine is spending money on coffee.
The third step is thereward.
This is the reinforcement that encourages you to continue with the habit.
Do a Swap
When you look at your habit loop,focus on the reward.
Duhigg gives theexampleof going out for drinks with coworkers.
The reward here is spending time with your colleagues and the relaxing effects of alcohol.
Or, invite your favorite coworkers to go on a lunchtime walk to get out of the office.
Set Reminders
As you form a new habit, remind yourself of your goal throughout the day.
Financial writer Cheryl Lockrecommendsmaking the habit part of a mantra you come back to throughout the day.
In the study, participants tried to floss more regularly.
By lining up flossing with another positive behavior, participants were able to maintain their new habit more successfully.
Choose a good habit youve already got down, and then add on.
Automate It
Taking the brainpower out of decision-making is the ultimate way to maintain a good habit.
If you dont have toactually take actionto make a positive financial change, youre winning the game.
So if its taking you a while to get in the habit ofchecking your budgeteach week, dont despair.
And dont give up either.
Keep at it, and eventually youll form a new, positive habit.
Your Turn: What financial habits are you working on?
What strategies do you use to make a new habit stick?
It sounds appealing right?
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