A few weeks ago, I wrote an article about how to get through the "boring middle" of a big goal. Almost every big goal goes through at least three key phases: a "honeymoon," when it's new and you're exploring and discovering and it's exciting; a "boring middle," where you just have to keep chugging toward the end; and the conclusion, where you often rush to the finish and enjoy the success. As I noted in that article, many goals fall apart during that transition from the "honeymoon" to the "boring middle," which is why I offered a lot of advice for getting through that phase.
One of the biggest pieces of advice was to not focus on the big goal at all, but focus on a daily system of tiny steps and habits that will move you toward your goal. You want each day to inch you toward that goal, and you do that by completing lots of little steps and have a set of habits that causes each day to naturally move you a little closer to your goal.
For example, let's say that I'm living paycheck to paycheck and I want to change things. My big goal is to pay off all my debt, and then beyond that, I want to be able to save for a financially abundant retirement.
That's a fantastic goal, but the most effective way to get there is to have a system for financial success made up of a set of daily habits and routines that will get you there. Just live by these habits and complete the daily routine - and don't do anything to undo your progress, of course - and you'll eventually achieve that goal. That way, you only have to focus on today, nothing else. If you nail the habits and the routines today, then you've done your part. There's no need to worry about the long term - you're basically making it inevitable.
How do you get there? Well, you can start by asking yourself what does a typical day in my life have to look like to gradually start moving me in the direction of my financial goals? What habits do I have to adopt in order to have each and every day naturally constitute progress toward where I want to be?
Here are ten habits that work well for me, and might work well for you, too.
Habit #1 - Each Day, Evaluate One Life Routine
I wrote about this concept recently when describing the idea of the "minimal day." Basically, the "minimal day" is one in which each of the normal daily life routines you have - things like driving to work or doing the laundry - are analyzed and minimized in terms of cost, time, and efficiency.
For example, if you spend 30 minutes really evaluating how you do laundry and you figure out how to shave 5 minutes off of the whole process, from dirty laundry basket back to dresser drawer, and spend $0.20 less on detergent and heating and water along the way, then you've permanently altered your "minimal day" going forward.
Each day, evaluate one specific little element of your life. What steps do you go through to wash a load of clothes? To dry a load of clothes? To wash a load of dishes? To drive to work? To eat lunch? To take a shower? Literally anything you do on a daily (or near-daily) basis that consumes some resource - time, money, electricity, soap, whatever - can be evaluated.
Are you driving the most efficient commute? Are you using the most cost-effective laundry soap? Are you using the most cost-effective mode on your washing machine?
Each day, just pick a routine and evaluate it. I've found that there are literally hundreds of routines in my life that I can look at, and I try to look at one a day and ask myself if I'm doing it efficiently or not. I give it several minutes of thought, usually with Google, and I try to figure out the best way to do that one thing.
The thing is, it seems really silly at first glance. You're spending time to figure out how to shave a minute off of taking a shower? You're really looking at dryer modes to save five cents on the heating cost of a dryer load? Absolutely. If you figure out how to save just one minute and save $0.10 on something you do every single day, then you've saved more than six hours and $36 over the course of a year. Now, do that with 50 routines in your life. If you can do that with fifty routines, you've suddenly got an extra hour of free time in your life and you're spending $5 less every. single. day. for the rest of your life.
The beautiful part is that you're not really changing anything meaningful at all. This isn't about cutting things out of your life that you enjoy. It's about making the things you have to do as part of your life as efficient as possible in terms of time and money. It's well worth spending several minutes each day really thinking about your commute or about how you drive or about how you do dishes or about how you make supper or about how you go to the grocery store, because adjusting that routine in a way that makes it quicker and less expensive will move you toward your big goals automatically.
I literally do this once a day now, right at the end of my workday as I'm transitioning back to domestic life. I go through one thing that I haven't thought about lately in detail, just trying to make it a little more efficient. Not only do I save time and money doing this over the long run, it trains my brain to think about things in this way so that becoming more efficient with my money becomes even more natural.
Habit #2 - Think Ahead When You Run Low on Something
Whenever I notice something running low at home - not running out, but running low - I add it immediately to a running list on my phone.
Then, whenever I'm at a warehouse club - the place where I always buy gas, because it's usually $0.10 cheaper per gallon than anywhere else nearby, something I discovered using Habit #1 - I check that list on my phone. I often buy toiletries and household products there and some nonperishable foods, so I'll just stop in and pick up what's needed.
Whenever I'm making a grocery list, I check my "running low" list, too, and add anything that's appropriate.
Keeping a "running low" list ensures that you're never having to make any last minute runs to the grocery store or to Wal-Mart for something you could have easily had in the closet. Not only are those last minute runs often a waste of fuel and time, you often don't have the selection options you might otherwise have and you often wind up making unplanned incidental purchases as well.
Habit #3 - Look for Something Free to Do First
Whenever I have some free time, I look around at the options I have available for things to do, but I start by intentionally filtering out things that would cost extra money. I only start looking at things that cost money if I can't come up with something free - meaning something that just uses things I already have on hand or something outside the house without an additional cost.
When you use that as a firm filter, you start looking at things a little differently. When I'm looking for something to do, I first look at things like the unread books in my Kindle library or the games already in my Steam collection or the board games on my shelf. I'll look at the city website and see if there's anything interesting to do. I'll check out Meetup and look for something of interest.
The key thing here is to be open to what you find. If you think in advance that everything you discover will be boring, then everything you discover will be boring. On the other hand, if you think in advance that you're going to find a bunch of interesting things and have to choose between them, then you're very likely to find a bunch of interesting things and have to choose between them.
Habit #4 - Eat Almost Entirely at Home and Save Takeout and Restaurants for a Special Occasion
Eating at home, or eating food you prepared at home and took with you, should be your default mode for all food consumption because of the enormous cost savings and health benefits. In other words, your habit should be preparing food at home at every opportunity and eating food prepared by others on rare occasion.
What about the convenience of fast food? If you find that your daily routine involves relying on fast food a lot, get in the habit of packing a meal the night before or in the morning and taking it with you.
What if I'm bad in the kitchen? If you're bad at cooking, the way to get better is with practice. Start with simple stuff that you can easily prepare and that you know your family likes. Honestly, the meal that got me into cooking at home was pasta with sauce, which is incredibly easy. Boil water, toss in pasta, wait ten minutes, strain it, add sauce, serve.
There are a lot of meals that can be prepared at home for $1 or $2 a meal. You simply can't match that with takeout or restaurant eating. Not only that, most home-prepared food is far healthier and often tastier than restaurant fare (unless you're spending huge amounts at a restaurant), and there's more variety in what you can prepare at home than you'll find on any restaurant menu.
A final point: when you make home food preparation the norm, eating out begins to feel like a special occasion, one worth anticipating. It doesn't seem ordinary and boring any more.
Habit #5 - When You Make Some Foods, Make a Double or Triple Batch and Freeze the Extras
Whenever I make a pot of chili, I make a giant pot of chili. I mean, I'm already pulling out the big pot and already loading it up with chili powder and tomatoes and all of the other stuff that goes into chili, so I just throw in three times as much.
Then, when it's done, I put all of that extra chili into a handful of reusable containers - some individual sized and some family sized - and I label them with masking tape. "Chili - October 9." I pop them in the freezer and forget about them.
One day later, I need something for a quick lunch. If it's just me or just me and a kid, I'll grab one of two of those chilis out of the freezer, thaw them, and heat them up. If it's the whole family, I'll do the same with a family-sized container.
Every time I do that, it's a really cheap meal. It keeps us from eating out or eating up something else, because having meals in the freezer is a big savings. Furthermore, when I make huge batches of chili, I'm able to buy ingredients in bulk, so it's even cheaper than just making a regular batch of chili.
This doesn't just work for chili. It works for a lot of soups, stews, casseroles, and other meals. I even do it for things like breakfast burritos. If it's something that can reasonably be frozen, I try to make a triple batch of it, if at all possible.
Habit #6 - Review Credit Card Bills and Bank Statements When They Come In
When you get a credit card bill or a bank statement in the mail, sit down with it that evening (or as soon as possible afterwards) and go through it line by line.
What are you looking for?
First and foremost, you're looking for inaccuracies. You're looking for charges that shouldn't be there, for starters. That's an indication of some kind of fraud, and it's something you need to root out immediately.
Second, you're looking for bad spending habits. You want to find charges that you don't remember at all and those you just barely remember and ask yourself whether or not those were really worthwhile expenses (hint: unless they were for absolute needs, something that forgettable wasn't a worthwhile expense). Also, reflect on anything that's obviously not need-based and ask yourself whether it's actually an expense you need. In particular, look at expenses that are often repeated. Is this a routine you really value in your life? Is it something that's perhaps better as a less-frequent routine? For example, I know I value a coffee shop visit if it's on the order of once every three weeks or once a month rather than once a day, and the rest of the days are centered around cold brew coffee at home.
When you find a few spending mistakes, spend a moment or two visualizing a better way to do those things. Visualize yourself making coffee at home, or going to the library instead of going to the bookstore, or whatever a reasonable alternative activity is.
Habit #7 - Tell Yourself "No" a Lot
One of the hardest things for many people to do is to simply tell yourself "no" when you have enough money (or plastic) in your pocket and you see something you really want. It's that exact feeling that fuels the tremendous consumer spending all around the world and leads to 80% of Americans living paycheck to paycheck. The only problem is that such a habit does not lead to financial success.
You have to get in the habit of telling yourself "no," and doing it quite often.
There are a number of ways of doing this and of making it easier. One way is to simply put blockades in the way of your ability to buy things. Delete your credit card numbers and PayPal information from online shopping sites. Don't carry a credit card with you; just take enough cash for what you know you'll need.
Another good tool is to reduce your opportunities to buy and your opportunities to be influenced. Cut down on your media diet, especially television, idle web browsing, and social media. Stop visiting stores and e-commerce sites unless you have a specific purchase in mind.
In the end, though, it still comes down to saying "no." A good tool for this is to practice the "ten second rule." If you're about to buy something you don't absolutely need, hold it in your hand for ten seconds and think strictly about the reasons why you shouldn't buy that item. Give yourself longer than ten seconds for anything remotely expensive. Why do you not need to buy this? Often, that will talk you right out of a purchase.
Habit #8 - Put in the Work at Your Job and Career
To put it simply, when you're at work, put in the work. There's nothing else you can be doing that will increase your income more effectively than that. Not only are you a more productive worker in that moment (increasing job security and increasing the likelihood of a raise in your current job), you're also building skills for the next step in your path (which will almost always mean more pay).
Yes, you'll often have situations where you don't have an immediate task to do. Find one. There is always something you can be doing. Clean up something. Fix some low quality code. Sit down with a book or a journal in your professional field. Participate in professional online networking by writing a blog post about your professional interests and sharing it in appropriate places. Work toward a certification. Study for a class you're taking that will help you get a degree related to your field.
If you're still struggling, go to your manager and simply ask what they would want to see from you in order to earn a raise or a promotion, then use the things they tell you as a checklist for every moment of downtime.
Putting in the work should be your professional habit. It will reap huge rewards, because it will make you stand out from the crowd of people who don't put in the work.
Habit #9 - Love What You Have
Rather than constantly yearning for things that you don't have, train your mind to reflect on and love the abundance that you do have.
You have your health. You have people you love and who love you. You have more options for entertainment than you can ever possibly enjoy. You have all kinds of wonderful things in your life.
Make a conscious effort to focus on those things instead of the things you want and don't have.
One great way of doing this is to have a gratitude journal. Make it a daily habit to list five things you're grateful for in your life, and try to list something you haven't listed in the last week or so.
You'll soon begin to feel that your life is incredibly abundant... because it is incredibly abundant.
Habit #10 - Make As Much of Your Finances Run on Autopilot as Possible
This is a subtle thing because it's not actually much of a "habit" you have to practice in daily life. Rather, it's just an extension of all of the other habits, with a very small routine of changing things up whenever a bill changes or something like that.
The goal should be to try to get as much of your life on complete financial autopilot as you can, so that all you have to do is peek in regularly and make sure everything's going as planned. Have all of your bills paid automatically. Have money transferred to savings goals automatically - money into a savings account for an emergency fund, money into a 529 for college savings, money into a 401(k) or Roth IRA for retirement savings, and so on. The money that's left is the money you have to spend freely on wants and desires.
That way, all you really need to do to keep up with your finances is to check in on things every week or two in order to ensure that things are moving along smoothly. You are naturally migrating toward your financial goals with this system because all of the savings is just happening automatically.
Good Tricks for Building Habits
Habits are tough things to adopt as they require us to change comfortable behaviors that we're used to, even if the new way of doing things might be better. Here are three things I do to hep myself build habits.
One great way to start building habits is to spend a bit of time each day visualizing scenarios when you want those new habits to kick in and visualize yourself in detail doing things with the new habit. For example, I might visualize myself grabbing the next-to-last roll of toilet paper and then going on my phone to add them to our list, or I might visualize myself at the warehouse club buying gas and then checking my phone to se if there's anything I need there, or I might visualize myself checking the mail and grabbing a
Another good tactic is to use the strategy described in the book Triggers: keep a list of habits you want to establish, review them (and visualize yourself doing them) each morning, and then score yourself each evening on whether you did your best to stick to that new habit. I've been doing this for about a year now and it works really well if you stick with it. (This kind of morning review and evening review is a great thing to stick on your to-do list; habits are a little bit trickier to do.)
A final strategy I use for building habits is to keep a streak going. If there's something I want to do each day, I'll print off a wall calendar or even a piece of graph paper. Whenever I complete that task that day or live up to that desired behavior each day, I'll fill in the box for that day. After a few days, I have a streak of solid boxes going. After a few weeks, I have a really solid streak going and it starts to take on a life of its own. I don't want to break that streak. The longer it keeps going, the more devastating it would feel to break that streak, but also the more it becomes just a purely natural habit in my life.
So much of financial success is about habits and routines. It's about instinctively making good choices when decision points come up. It's about establishing a normal pattern of behavior that keeps your expenses well below your income. It's about turning away from a sense of being deprived and looking instead at a sense of abundance.
Build a system of habits for yourself and you'll find that financial success comes much easier than before.