Behavioral change is hard. You may
have resolved to adjust your approach to spending, saving, or
investing this year—but just because you know a new habit would be good for you
doesn’t mean it will be easy to adopt. Small tweaks can have significant
impact, though, so I’m always looking for easy, repeatable tactics that
anyone can use to take control of his or her finances. Here are a few of my
favorites.
Give it a minute. Spend
one minute each day—ideally, at the same time—to check in on your finances. The
best way to do this is with an account-aggregation app, which pulls together
your credit card and bank accounts and lets you scroll through all your recent
transactions. (You can also use this to catch incorrect charges; I’ve found
restaurants changing my tip or double billing me.) You could also use
individual bank or credit card apps on your phone or even scan the
cash and receipts in your wallet each morning. The key is to see whether you’re
spending money faster than you want to.
Get in your face. Inclined
to duck financial tasks? Use visual cues to make avoidance harder. On my phone,
for instance, I place my own financial app right next to my other favorite app,
Instagram.
Not every habit needs tech tools. I love using sticky notes
as reminders and goal reinforcement. Planning to redo your kitchen next year,
or saving up for a new car? Write that on a note and stick it to your mirror so
you see it every morning. Better yet, tape up an image that will remind you of
your goal. Visual cues are powerful, and it’s easier to skip small, unnecessary
purchases if your eyes are literally on the longer-term prize.
Ping yourself. How
do I remember friends’ birthdays and anniversaries? I put them on my Google
Calendar. So I do the same for AmEx bill deadlines. Set up recurring
alerts for all your financial tasks, whether it’s paying bills, organizing
tax documents, bumping up 401(k) contributions, or checking to see if your portfolio
needs rebalancing.
Go first. When
I ask people how they approach saving for a big goal, they often tell me that
they spend what they need to each month, and then save anything left over. But
if you’re not an instinctive saver, that’s unlikely to be effective. A better
technique is to fund a “new kitchen” account, say, just as you’d pay a mortgage
or utility bill. Determine how much you can realistically put aside each month,
and then transfer that into savings before you spend any discretionary cash.
Take victory laps. It’s
tough to stay motivated while tackling long-term goals. To keep myself on
track, I set smaller interim goals— tangible signs of progress that I can hit
at shorter intervals. Then I give myself a modest treat, like a manicure or 10-minute
neck massage, once I’ve reached each mini milestone.
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