Do You Have A Habit?
A girlfriend who recently lost a lot of weight said to me a short time ago “it’s all about the small decisions”. Her theory is that the single decision to slim down isn’t enough. You don’t gain weight just by deciding to, or because of one piece of cake or one failure to attend the gym. It’s all the little day-to-day decisions that add up and get you to a place of chubbydom. Not going to the gym one day won’t make a lot of difference, if you go every other day. Eating a piece of cake won’t see your weight soar, if you aren’t consuming such calories every meal of the day.
It seems to me that the same can be said for debt, savings and budgeting. Indeed, it’s pretty rare that just one decision puts you in substantial consumer debt. Equally, it’s not just one decision that sees you end the month with your budget in tatters. Certainly it’s not just one decision that results in retirement with no savings.
Unhappily, often we fool ourselves about the substantial cumulative impact of these little decisions. I can speak for many a dieter in my office who tells themselves that “oh, one piece of cake won’t matter”. When I look back on my debt-laden years, I absolutely failed to recognise the impact of such choices too, often convincing myself that another few hundred dollars on my credit card wouldn’t make much difference.
The fact is, lots of little decisions are what makes a habit. The good news is, you can change your habit for the better and to help you achieve what you want most in life just by making good little decisions. The even better news is that if you slip up along the way, that’s okay – if you recognise your little decisions for what they are.
So how can you use your little decisions to improve your financial situation? Here are some ideas:
- Grab a notebook or the ‘note’ function on your mobile (cell) phone and jot down every time you spend less than $10 on something for a week. At the end, take a look back and add up how much you spent. Multiply it by 52 and you have the grand total of a year’s worth of your frittering. Have another look at the list and see what you could have done without. Perhaps a bottle of water you could have waited ’til you got home for, or a magazine you could have surfed the web for similar information.
- Take a look at your bank or credit card statement from last month. Highlight all the transactions on it that were under $100. Were they all really necessary? Can you even remember every transaction occuring?
- Examine your passion – we all have one! Often we develop selective memory when it comes to our biggest source of delight. My big passion / vice involves my wardrobe. This year, I’ve started the habit of noting the source of every fashion-based expense in my budget. Why? Put simply I found that I was purchasing things I didn’t end up getting the use out of. I could absolutely have done without the two dresses, the shirt and the knit top I bought at that warehouse sale last year. No, I didn’t go into debt for it, but the money could have been used for something I truly loved at the very least.
- Get a piggy bank. I’m the exception to this rule, but many people don’t track cash. Start the habit of putting all your coins at the end of the day or week into the piggy bank. You probably won’t notice the difference, but taking a full piggy to the bank and making a payment on a debt or into a savings account will feel great.
- Create a micro-payment toward whatever it is you’re working towards. If you’re paying off a credit card, your mortgage, a car loan or creating a savings stash, set up an automated micropayment toward your goal. Even if it’s as small as a dollar a day, you won’t notice the difference today or tomorrow, but over time you will.
Remember – the point of being aware of your little decisions is to tweak your habits to make them work in your favour. You shouldn’t feel overwhelmed or like you’re trying to discipline yourself, but rather that you’re just being nudged in the right direction.
After all, Rome wasn’t built in a day.
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