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We have to have these automatic systems. Otherwise, we’d never make it out of bed if we had to rethink every step in the process every morning. Habits save us time. A lot of habits are good and work well for us.

It can be argued that our whole life is made up of a series of habits. We have to have these automatic systems. Otherwise, we’d never make it out of bed if we had to rethink every step in the process every morning. Habits save us time. A lot of habits are good and work well for us.

I have a habit that works well for me on the days I go to the gym. The night before, I lay out my gym gear in the bathroom ready for me to put on as soon I’ve washed my face. My water bottle is full, my sweat towel is next to the car keys, and within a few minutes of waking up, I’m out the door and off to the gym.

A habit is a three-step process

  1. There’s a cue – tomorrow morning is a gym day.
  2. There’s a routine – laying out the gym gear.
  3. And there’s a reward – I feel great after a workout.

These three steps apply to everything from making a cup of tea to spending money.

Recognising the process to your money habits

So let’s look at a money habit that maybe you want to break. Maybe you impulse shop and spend a bit more than what you feel comfortable with. You want to have a holiday, so you need to curb your spending.

What might the cue be? There are plenty to choose from, and they’re usually linked to emotions.  You might be feeling stressed, angry, excited for example.  Maybe you’ve just received a bonus or had some fantastic feedback on a project you worked on.  You’ll be able to identify which emotion or situation is the cue for you.

The routine? That’s the easy part: you go shopping. Either online or in person.

The reward? You come home with something.

Changing the money habit

The key to changing a habit (according to Charles Duhigg in his book The Power of Habit) is to change the routine – the second part of the loop.

The cue is the same – an emotion or situation kicks in. The reward remains the same – you come home with something. But the routine has changed.

What might you do to change the routine? Instead of hopping online, or driving to the closest shops you could you could grab $10 and head to a café and have a coffee and a muffin instead, maybe not so good for the figure, but better than impulse spending $50- 60. You could buy a magazine, a small gift for a family member, a bunch of flowers to brighten up your office, as long as you stick to your $10 limit that you have set yourself.

While this sounds simple, and with practice it does get easier, the key is being able to understand the cue and the reward that is part of the habit. This means carefully observing yourself and watching your behaviours to see what you’re doing immediately before and after the routine.

You can do it!

For habits to permanently change, you must believe that change is achievable. It can help if you have a support team around you who know what you are trying to achieve and can help support you along the way.

This type of behaviour change has been very effective in stopping smoking, losing weight and is also the backbone of alcoholics anonymous. So it’s a very powerful tool to use when you want to make a change in your life.

About the author

Lynda is a co-founder of Money Mentalist and accountant with more than 20 years in practice, who also has post-graduate training in psychology.  She brings unique business abilities and an in-depth financial professional background to her integration of psychology and neuroscience with Mentor Coaching.  
 
Lynda’s passion is helping people achieve their personal and business goals by teaching them to understand the link between their ‘money mindset’ and the way they manage and grow their wealth.

Connect with Lynda

If you have a money habit that isn’t working for you and you want to make some positive changes in your life, click the button below to get information about our coaching and mentoring programmes.