Financial Habits: How I Help People Help Themselves

How does one begin to make positive financial changes with new habits in their lives…and make them stick? Most people, like myself when I began this journey, discover what works and what does not work after something bad happens. That’s when self-education reveals itself to be the best teacher if we are willing to accept the harsh lessons we experience through it.

One of the many keys to effectively changing your life is prioritization. Everyone has limited resources, whether those resources are time, money, or energy. Nope, you’re not the only one walking around with financial issues and having difficulty turning things around. Whew! Isn’t THAT relieving to know?

Now, since you’re likely to be limited (only for now, right?!!) it only makes sense to focus your resources on creating those financial habits that will have the biggest impact on your situation.

Give this process a shot to help you focus on your most important financial habits:

  1. Be Honest – What is the greatest pain in your financial life? What keeps you up at night? Is it the lack of income and cash flow? A non-existent emergency fund? Living paycheck to Sunday? No consistency savings in creating long-term savings? Your 401k turned into a “201k” due to a loss in the stock market?

Personal financial awareness is the first step towards a better life. And yes, please be objective about it. There is no place here for finger pointing, only the tough swallowing of a rough life lesson. Only backtrack the reasons why you got in this predicament in the first place and how you can avoid making the same costly, time draining and emotionally disruptive situation the next time it comes around in a similar form.

  1. What new habits would have the biggest impact on your finances? Knowing that you need to work on your savings, get out of credit card debt or make more money doesn’t necessarily highlight the optimal habit to adopt. A new habit without the consistent reinforcing activity behind it is just a wish. Everyone wants financial change yet most everyone remains broke. Get deeper rooted in “WHY” and the impact on your personal finances each potential new habit would bring to you.

For example, make a list of all the potential habits you could build that are related to your greatest financial concern. BRAINSTORM or jot them down WITHOUT analyzing them, even for a few seconds!

Then, prioritize your list based on the likely outcome from incorporating that habit into your life. To make things easier and remain laser focused, eliminate the bottom 80%.

Now, re-examine the 20% that remain. Visualize the impact each of the remaining possibilities will have down the road 1 month, 6 months, 12 months, and 5 years down the road. How will the habit impact your life 25 years from now?

Visualize HOW GOOD a new financial life would make your feel. If fact, move around and SHOUT IT OUT! Motion creates EMOTION! Don’t worry if people think you’re a little off. I’d rather you be crazy and RICH, than normal and broke!

Now, choose the habit that makes the most sense after carefully considering the future. If you’re torn between 2 or more habits, consider which would be the easiest to implement. Never underestimate the power of momentum. You can swing back around and pick up the other habits in the near future. You’ll create a confidence with small victories along the way as you come through with the smaller promises you have made through this journey.

  1. Even Gurus Where Beginners at Once – It is ok to get out of the gates stumbling a bit. You will always be your harshest critic. Even if this means bringing parts of your personal finances up to an average level for a while before attempting to be a high achiever. The worst aspects of your financial life are causing your greatest financial discomfort.

In other words, eliminate consumer debt (credit cards, car loans, personal loans), build up an emergency fund with CASH and save a consistent percentage of ALL your income sources. Give and tithe to your church or non-profit (oh and, don’t let the pastor or other “religious family” give you a guilt trip of having to surrender certain percentages or your income. God doesn’t need your 10%, 20% or yearly bonus check. He needs you cheerfulness, love and obedience). Also have adequate insurance policies, and be consistently saving for retirement BEFORE worrying about the purchase of the latest iPhone, new timeshare or home remodeling project.

On a 1 to 10 scale with 10 being the greatest, bring each part of your finances up to a “5” before attempting anything on a grander scale.

(NOTE: If your habit doesn’t address a fundamental, personal finance issue, be certain your target habit is really in your best interest. Get rid of the fluff. Getting your financial priorities in order is great but…you will still have problems and drama in your life. The question is do you want to go through them with OR without money?)

  1. Plug Into an Environment – budding new habits can be easily reverted back to old habits if an environment to foster the new habits is not there to support it. This is the reason why so many fitness, health and wellness, get rich quick companies have so many infomercials during certain parts of the day. People are actually buying this stuff, over and over! Yet the products and information stay on the purchaser’s shelves instead of in their actions. An environment of new people wanting to have more, willing to do more and willing to be more will greatly accelerate your success rate and reinforce the good financial habits you are looking to develop.

Building Your New Financial Habits from Here

Some financial habits might require you to gain a significant amount of knowledge, skills or have a starting point that is currently beyond your reach. Determine if the habit is possible with your available resources and expertise. It’s possible another goal or new personal associations might be more appropriate.

Time is a limiting factor for everyone, and there are only so many hours that can be applied to building and performing a new financial habit. Nothing happens overnight…you didn’t get into this financial scenario in one day so don’t expect a different financial life by only investment a few days into it. Bottom line – Ensure you’re spending your time wisely and effectively. The most important habits are often the least appealing. Focus on positive habits that best enhance your finances and find ways to get better everyday.

Do you feel you need someone to walk you through developing good sound financial habits? Are you around people that encourage you, or discourage you? Could you use a consistent system and process that helps you track your progress? Please subscribe to this blog’s RSS feed and email me to set up a personal interview and qualify for an invitation to our next local events in the Chicago, Dallas, Houston, Miami, Boston, Kenosha, WI and Redding, CA areas

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