Everyone knows that saving money monthly and having a budget – or what I prefer to call a “spending plan” – are important practices for financial success. Although they are not hard concepts to understand, they are hard to apply in daily living. During a recent chat with Enid Young Professionals, we talked about the importance of building a financial strategy and forming good spending habits early. The philosophy of how we form good habits and break bad ones has been top-of-mind for me lately thanks to Craig Groeschel’s recent interview with the author of Atomic Habits, James Clear. I highly recommend listening to the podcast episode in its entirety, but these are my main takeaways and how they relate to the work we do at Wymer Brownlee:
Small habits make a big difference because they compound over time. Bypassing that Starbucks latte or cooking at home rather than eating out aren’t going to impact your savings account overnight – or even after several weeks. But consistently shelling out money for things not in your spending plan isn’t moving you closer to your savings goal. These small sacrifices might not be fun, but to quote James Clear, “The cost of your good habits is in the present, but the cost of your bad habits is in the future.” Good habits are about prioritizing what you want most over what you want now.
Goals are necessary but not sufficient. There is a lot of talk in the business and self-help worlds about the importance of setting goals. And I whole-heartedly agree. But simply focusing on the outcome and ignoring the steps that help us get there won’t be very effective. If you have a goal of taking a meaningful family trip once a year, what behaviors are necessary to execute that? Well, saving for it, of course. But also building good relationships with your kids and spouse throughout the year. Having family dinners together where you can brainstorm the purpose of the trip. Setting aside a date night to research where to go. If solid relationships are in place and you’ve dreamed up the trip together, everyone will make it a priority when it comes time to arrange schedules. Clear says, “Winners and losers have the same goals but vastly different results.” Be someone who gets the result they want by focusing on the habits that will make it happen.
We must master the art of showing up. Sometimes, reaching our goals seems too big a task that we give up before we get started. However, we have to get into a pattern first – even in a small way – before we can improve. Putting on running shoes won’t make me a runner, but I can’t be a runner without first putting them on. Clear recommends that whatever your goal, start by forming a habit you can do in two minutes or less: putting on shoes, doing five push ups, simply driving to the gym. Because every time you do those small habits, you’re proving to yourself you’re the type of person who achieves it, and over time, your behavior and belief in yourself will produce the outcome you want.
Your tribe influences your habits. The social norms of groups we’re in play a big role in our behavior. It’s hard to sustain habits in a tribe with conflicting priorities. So, if building a legacy of faith is a priority, having friends who go to church regularly will help that habit flourish. If you want to be someone who puts family first, hang with a group who shares that expectation. Clear points out that relationships are complex and we all have responsibilities we shouldn’t ignore simply because our group doesn’t support a habit we’re trying to form. However, it’s crucial to carve out space with like-minded people so your new habit can thrive – even if only an hour a week.
Finally, we need to make it easy on ourselves to follow good habits and hard on ourselves to maintain bad ones. That means making our bad habits less obvious and less convenient. If I’m drinking too much Dr. Pepper in the evenings, maybe I don’t keep cans in the fridge – or keep them in the house at all. If I want to eat healthy, maybe I spend Sundays prepping meals for the week so I don’t cave to junk food due to lack of planning.
I love that as a wealth advisor, a huge part of my job is coaching clients on the behaviors and daily decisions that will help them reach financial independence. I’m encouraged that by understanding how we make and break habits, a willingness to be vulnerable and loving accountability, the lifestyles and legacies we want are within reach!
Blog by Kyle Brownlee, Chief Executive Officer.