simple lifelong habits for financial wellness

I just finished reading “How to Change” by Katy Milkman (there will be a lot more on change later this year). One profound idea from the book is that when we’re working to change, we must commit to a lifelong process. We cannot make a change for a month or two and expect good habits to stick (in fact, research shows how quickly we revert to our earlier habits!).

Conceptually, that makes sense. But frequently, what we really want is a quick fix. We want to journal for a month and have a transformation; go to a weekend retreat and become new people; consolidate our debts or watch a tik tok to achieve financial wellness. Unfortunately, that’s not how it works.

 

To develop habits, we must perform them until they become automatic. We must repeat the practice to obtain the change we want until we’re there, and once we’re there, we must continue the practice to maintain the change we desired.

When it comes to creating good money habits, here are the non-negotiable, lifelong habits you need:

  1. Developing  a spending plan.

  2. Tracking your spending.

These actions are both necessary. One without the other doesn’t work. To know you’re sticking to your spending plan, you must track your spending. If you’re tracking your spending, but don’t have anything to tell you where you can spend, you won’t have meaning behind your tracking.

You might see this as glass-half-empty news, but like Katy Milkman, I see this as glass-half-full news – change is absolutely possible and lasting change is just a matter of getting started and maintaining these simple habits.

Previous
Previous

matching your spending plan to your season of life

Next
Next

don’t sink into this trap! Understanding the sunk cost fallacy.