If I know you, I know this to be true:
You’ve likely tried a ton of things to get your finances in order–very few of which have stuck for the long-term.
So, I am going to share with you the ultimate guide on financial changes!
You likely tried Mint.com and hated being notified that you went over budget while buying a gift for a wedding.
You likely built an elaborate budget one time, used it for a couple of weeks, and fizzled out when things didn’t go as planned.
You likely tried some new savings tactics (mostly around not eating out), and find yourself feeling guilty when you want to go out with friends.
My clients typically feel this frustration, too.
Although I love hashing out goals and numbers (and those things are important), the real benefit I offer is giving people real-life strategies to stick to their plans for the long term.
Recently, these discussions have become the biggest source of relief and “ah-ha” for my clients, so I wanted to share some of these “stick with it” approaches with you today:
1. Start By Taking One Step That’s So Small it Seems Almost Insignificant
A few years ago, I decided I wanted to run a 5 km. On the first day of “training,” I laced up my shoes and just started running to see how far I could go. After 10 slow, awkward minutes, I was sweaty, panting, and hurting.
Thinking this was the only way to “train,” I kept pushing myself–never running further than the previous day. Frankly, it sucked, and I was ready to quit.
In a last-ditch effort to fulfill my goal, I looked for a running plan to follow. I found the Couch to 5 km program, and everything changed.
For the first 3 days of training, the program asked me to run for 60 seconds, followed by walking for 90 seconds (repeated for 20 minutes). It was so super simple that I had to follow through. 60 seconds of running? Totally doable.
The week after, it was 90 seconds. Then 3 minutes. Each small increment was easy and doable. In no time, I built up to running a full 5 km.
This can be applied to your finances, too. While you may initially feel motivated to change everything all at once, instead, start with just one super-simple task. Maybe you put aside just $30 per week to build your emergency savings. Maybe you just call your credit card company to ask for a lower interest rate.
A month later, add something else.
This is not settling or being lazy. This is progress.
2. You’ll Have to Muscle Through the “Awkward Phase”
Remember when you were a kid, and you would stand up on the pedals of your bike to power the wheels for a few seconds? Once you had the wheels turning, you could sit down and keep things moving forward much more easily.
That’s what it’s like when you’re making a change in your finances.
When you first start to limit your spending, put an extra bit into your debt, or build little savings, it’s probably going to feel awkward and take more energy than seems necessary.
You may have forgotten your credit card company login info and have to go through the “change password” stuff, or you may want to watch your bank account like a hawk after setting up automatic transfers to savings.
However, if you can just power through the first awkward phase of change, you’ll likely have an easier time maintaining the change afterward.
3. Create Systems to Make Changes (Almost) Automatic
Systems are the “automatic” way to help you stick to your financial goals.
The simplest system is financial automation. You can automate bill pay, saving, investing and debt repayment with ease these days.
But systems don’t end there. You also can create systems in other areas of your financial life.
Maybe you plan your meals each week before grocery shopping to cut your grocery spending. Maybe you have a weekly reminder on your phone to check your bank accounts and pay bills. Maybe you take out a specific spending amount for the week so that you don’t overspend.
Systems make change automatic and sustainable, so seek them out everywhere.
(They also limit the need for willpower–saving you time and energy!)
4. Re-wire Your Habits by Rewarding Yourself
You know how you’ll justify buying something because you get credit card rewards points? You should have your own set of reward points for doing good things for your finances, too.
Around 40% of our daily actions everyday habits–not decisions.
In that regard, you’re likely “stuck” in a few automatic habits that get in the way of your financial success. In order to re-wire those habits, you’ll have to find what triggers the bad habit, change that pattern, and reward yourself for the new behavior.
For example, if you go months without checking your bank account. when you do something as small as logging in once per week, reward yourself for it.
Or, if you tend to get takeout when you have food in the fridge, reward yourself for a homemade meal.
You’ll start creating the positive feedback loops in your brain that say, “when I do this new thing, I get rewarded for it.”
This isn’t woo-woo life-coach stuff here, this is the way your brain builds and sustains new habits.
What to reward yourself with? I like flowers and chocolate, but something else may call you!
Inevitably, when making any big financial changes, you’ll come across moments or situations where you won’t want to, or won’t be able to sustain the change.
Maybe you can’t put as much money into your savings or debt as you thought you could. Maybe you have a *thing* that forces you to spend more than you’d like. It’s life.
Instead of declaring yourself “bad with money” and throwing in the towel, drop back into a slower pace of change. Save a little less. Pay off a little less debt. But keep doing what you know is right for the long-term.
All progress is forward progress.
I hope you’ll find some of these mindset strategies helpful in making financial changes that last. Do one thing at a time, try creating systems that “automatically” keep you on track, and reward yourself for your hard work.
So with that–what are you changing? Which of these tactics can you use to stay on track?