We are at our best when we feel in control of our own life. Yet, many people are anxious about their personal finances and this impacts their ability to work. It can cause sleepless nights. It can make it harder to concentrate and deliver to the same standard as usual. For example, a study by Salary Finance showed that 42% of employees are dealing with financial stress and that money is the number one cause of worry. During COVID-19, that number worsened to 64% of employees feeling financial stress. That’s huge! Financial worries can affect people of all income levels and it can significantly impact mental health.

There is good expert advice out there that can help you if you feel anxious about your finances. But just knowing what is good for you doesn’t mean you’re actually going to put that advice into practice. Most of us think that knowing is half the battle but it’s not. Approximately 80% of resolutions fail. But you can turn your success rate around by taking a different approach: you have to create positive habits to make your goals a reality.

Create habits that will give you a reward

You create habits by establishing positive rituals (a routine) where you perform a series of actions in a prescribed order. The repetition of the actions will create a pathway in your brain that will make that behaviour automatic over time. That’s very useful because when we are under stress, we will regress to our most habituated ways. So this is going to give you the resilience you need to keep going.

Now, rather than forcing yourself to stop doing something, it’s better to create a new positive habit to replace the bad habit instead. For example, say you want to reduce your day-to-day spending. Rather than telling yourself to stop buying take-away lunch, create the habit of preparing lunch the night before, so you can grab it from the fridge as you leave your door.

To keep motivated, make sure that you know why you are doing it. Be clear on the reward it will give you.

Use the environment to support you

It is important to pay attention to the situation that will support you to make it as easy as possible. Think of this in the broad sense. You can use a location, person, mood, time of day, physical object etc to anchor it. What matters is that you change the visibility and convenience (proximity) of things that you do or don’t want to be doing. By having good things visible that promote the habits you like to create, you’re more likely to take that positive action more often.

For example, you can put your lunch bag out on the counter to give yourself that visual reminder in the morning. You can also put up barriers to make it harder to do the behaviour you don’t want to do anymore. For example, delete your Uber Eats app on your phone so it takes a lot more effort to make the order. Use a 20 seconds delay to your advantage!

Draft a simple “If…then plan”

Here’s a science-based mental strategy that you can use to find and fulfill your goals and change habits. It sounds very simple, but it will take effort.

1) Think about a goal that is feasible but challenging and write that down in three to six words: what is that you want to do that is dear to your heart? E.g. Save $200 more each month.

2) Then think about the best outcome (the reward) if you fulfilled that wish? Imagine this in your mind and formulate it in three to six words. E.g. Less stress due to lack of emergency funds.

3) What personally created obstacle stands in the way of you achieving your goal? Again, phrase it in three to six words and imagine it happening. E.g. Lack of time in the morning (to prepare lunch so I buy take-away food instead).

4) What would be an effective action/thought to overcome the obstacle. Put it in three to six words and again in front of your mind. Then write a very simple if-then plan. This will become your ritual that you do at the same place, at the same time. E.g. If I tidy up dinner in the evening (evening is the contextual cue), then I will prepare my lunch box.
You can repeat this technique to achieve different goals. But my advice would be to keep it practical and to start small and easy. Don’t try to go after too many changes at once. Make it fun where possible. For example, cook together with your partner or choose delicious and varied recipes rather than eating a mediocre sandwich every day. Use visual reminders in your environment to reinforce the positive behaviour. And finally, be consistent in your implementation for at least two months.

Of course there will be times that the execution of your plan doesn’t go so well. This doesn’t matter as long as you keep going. You’ll do better next time and it will add up in the long run. Don’t forget to celebrate your little wins each day. It’s really powerful to visually track your progress on a calendar or in an (habit tracker) app. The combination of positive emotion combined with consistent repetition will rewire your brain faster than without positive reinforcement.

Next steps

Don’t wait until tomorrow to make a plan and achieve your wishes. Take five to ten minutes of uninterrupted time now and write down your new ritual by hand. Once you begin, you often feel much calmer and able to move forward. And if you need further help, please do get in touch.

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