I don’t know about you, but as COVID continues on and we remain socially distanced and isolated, I have much more time on my hands to think about my daily habits and routine. According to researchers it takes anywhere between 21 days to 8 months to incorporate a new habit into your daily life, which isn’t bad when you think about a healthy habit that could be with you for the remainder of your lifetime! One way to create financial success is to also think about our daily habits and make small adjustments to help us live more intentionally. Here are some things that I have begun to incorporate.
Start Consuming 15 Minutes of Financial Education Per Day!
One of the things I have incorporated and really enjoyed is scheduled time set aside to read and consume information about topics I am interested in and that can improve my life. If you are reading this blog you are already well on your way to incorporating this habit into your daily routine-bravo! With so much at our fingertips (and most of it free) from audio books and podcasts to articles online, we really are capable of learning so much about so many things right from our living rooms. Start small and commit to listening to just one financial education podcast on a morning walk or drive (I highly recommend my Uncle Rick’s new show- Rick Bloom Talks Money), read a book about personal financial tips or spend some time reading a blog about smart money.
All the research shows that going to sleep just 30 minutes earlier than you currently do has all sorts of health and wellness benefits. In fact, a study from a few years ago observed a group of participants, ages 18-28, while they slept only 5 hours a night for a week, as compared to another group getting 8 hours a night. Twice a day they were given a decision-making task with two outcomes: either receiving a set amount of money for certain, or gambling for a higher amount and getting nothing if they lost. The results became more pronounced as the week went on. At the start, less sleep didn’t influence the participants’ decisions, but as the sleep-deprived nights added up, more and more participants took the bigger risk. Eventually almost all of them did!
What the results from the study suggest is that impulsive behaviors became more pervasive with lack of proper sleep and even worse, the overall awareness by the participants about why they were taking additional risk was phased out along with their lost hours of sleep! So, this is all a way of saying that in order to make smart choices both financial and otherwise, the body needs rest.
One tip I have really found helpful over the past few weeks is to use apps like Calm, Headspace or Breethe In addition to the guided sleep meditations and sleep sounds, I really enjoy the sleep stories features on these apps. I don’t think I have made it more than 10 minutes before dozing off to dreamland, which is a success in my book! Another money saving note. If you are an AMEX cardholder, you are entitled to a free year of premium membership and 50% off on the 2nd year membership on Calm, which would normally run $69.99 annually. Headspace is also offering a free year premium membership to anyone who is currently unemployed, works in health care or is a K-12 educator. They also have a special partnership with the state of Michigan with a dedicated page for guided mediations, stress reliving exercises and sleep music. Similarly, Breethe is offering free access to their premium platform for health care workers across the nation.
Hit the Pause Button
Have you ever made a purchase impulsively that you regret in the days and weeks that followed? I sure have and I know that I often kick myself for not taking some time to really think about what I wanted and needed. Over time these impulse buys can really put a dent in your wallet so try and focus on a new habit I like to call “hitting the pause button”. It works in practice by setting a threshold, say $250 in this example. Anything you want to purchase over the $250 threshold requires a self-imposed 24 hour waiting period. This is creating the habit of allowing yourself to “sleep on it”. After the waiting window passes ask yourself if you are still set on the purchase. In my experience, I have often found that I have completely forgotten about the must have item and grateful I pressed pause. Try it and see how your behaviors begin to change.
Focus on Quality VS Quantity
It is an age old adage that it is quality over quantity that matters. Deciding to try and purposely change your habits towards quality can have massive implications extending far beyond your financial well-being. Often times I think we don’t give much thought to whether a purchase or financial decision is a quality or quantity one, however once you decide to use these categorization tools it is hard to unsee them. Try doing this the next time you are out shopping. There is nothing wrong with starting small! Identification is really the first step towards change, then practice, practice, practice! If you are interested in incorporating this method into more elements in your life I highly recommend reading Marie Kondo’s book The Life-Changing Magic of Tidying Up (she also has a Netflix special). Another terrific read about editing your life is a book by Greg McKeown called Essentialism: The Disciplined Pursuit of Less.
Automate Savings and Investments
What you don’t see in your bank account you don’t spend right? Why not start setting up the habit of a recurring transfer to move money from your checking account to an investment or savings account. Start small and work your way up! Even if you just were to invest $50 a month for 40 years at 6% interest rate you would have about $100K in that savings account. There are a lot of terrific apps that will help automate this process so be sure to check out Acorns, Stash, Clarity Money, Empower Finance, and Qapital to name a few!
Another note, Bank of America was one of the first banks to offer automatic savings through its Keep the Change program. For those who already have a Bank of America account, this may be a seamless transition to automatic saving. If you enroll your Bank of America debit card, BofA will automatically round up your purchases to the next dollar and transfer the difference to your BofA savings account. Make sure to talk to your bank to see if they have similar programs
Learn to Say No
This is such a hard one for many of us, but sometimes when you are around others that have different financial priorities you have to get in the habit of saying no. Have you ever been out with another couple for dinner and they order expensive wine and a seafood tower while you drank water and had a hamburger? When the bill comes they say “let’s split it”, sometimes posed as a question and sometimes as a statement. I know these are difficult and awkward conversations, especially among friends and loved ones, but learning to say no is part of being an adult. It also has a major impact on your financial wellbeing. Maybe the dinner example is trivial but learning to say no and making it a habit when you are uncomfortable in any situation is important. It is your money, your life and you are in control, but it takes practice!
Even if you are able to just incorporate one or two of these habits, it is my hope that making small changes will empower you to build on your success. Stay healthy and happy!