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Get out of a Rut - Break and Redesign Habits

Many of our day-to-day spending decisions happen without conscious thought or planning. Use a vacation or other pause in your routine to assess where you are in life and map out what you want to accomplish. Step away from the daily grind and the unconscious habits that form over time to bring fresh awareness and choice back in the picture.

On my recent trip out of the country, I read Habit Stacking: 127 Small Changes to Improve Your Health, Wealth, and Happiness by S.J. Scott. The whole time reading the book, I was away from my usual daily environment so I could have a blank slate, without the existing routines imposing themselves. I was able to fully think things through without interruption by the usual triggers for existing habits. I took the time to write out how each habit I wanted to create fits into the bigger picture of life goals and also to specify what I would need to make sure I followed through. When we set goals it's easy to overestimate our ability to power through with towering willpower and huge motivation instead of thinking about the small details that derail our intentions (like scheduling shopping for the groceries you'll use for your lunch).

The Habit Stacking method:

The author recommends identifying small daily, weekly and monthly habits (5 minutes in duration) that can have an impact on your life over time, then connecting these actions into routines or "stacks" that are performed at a specific time and place. For each stack you would identify a trigger, like the alarm going off in the morning or getting home after the workday, that sets you in motion doing the small tasks to which you are committed. He recommends using a checklist at first until you have the routine memorized and can execute on autopilot.

3 Types of habits: Keystone Habit, Support Habit and Elephant Habit

- Keystone Habits: are those that have an impact on multiple areas of your life and will cause ripple effects of positive change when you engage in them. Think first of any of the actions that can positively uplift your state or your mood. Exercise is a powerful keystone habit as it will boost your energy through the day and it will help maintain your health over the long run also. My daily routine starts with a workout at home while watching an informative or inspirational video. The morning routine ends with making lunch and a smoothie to take to the office instead of spending $10-15 each workday.

- Support Habits: things you can do regularly that make it easier for you to accomplish your keystone or elephant habits. Try to think of the small "stitch in time saves nine" tasks that can prevent an obstacle from showing up and derailing your other efforts. One support habit I'd like to add to my routine is to lay out clothes for the next day before going to bed so that I don't have to stumble in the dark while my wife is still sleeping. Another support habit would be looking-up videos to keep my queue stocked for morning viewing so I don't get tempted to putz around before starting the workout.

- Elephant Habits: Some habits involve making incremental progress on a big project - these are called Elephant Habits (think of eating a whole elephant, one small bite at a time). One of the "elephants" I declared was to take charge of my retirement savings and to put in place an overall strategy and asset allocation to meet my financial goals. That isn't going to take 5 minutes but by making steady progress in small chunks, I am going to get the project done.

Continuous Improvement through Repetition:

I'm not a neuroscientist so take the details with a grain of salt but my understanding of the brain is that the cerebral cortex is where the higher levels of our thinking take place - where we handle things like planning, goals in the distant future, intangible concepts like money. The rest of our brain controls emotions, input from the senses, basic drives and routine motor behaviors mostly behind the scenes, as far as our conscious mind is concerned. We often catch ourselves in the middle of doing something and don't even remember having decided to do it. The structures outside the cerebral cortex that handle unconscious processes had a huge head-start from the evolutionary perspective and are faster than our rational deliberative mind. Your poor cortex doesn't stand chance in a battle of brawn against your existing habits and emotions - you have to out-think and tame that older lizard brain rather than try to fight against it.

Declare your new habit, see what obstacles come up to derail you and then create a plan to outsmart the obstacles rather than try to fight them head-on with willpower alone.

One obstacle in the past was the snooze alarm where some mornings it was easier to hit that button over and over rather than get up at 5:30 AM to start my kettlebell and calisthenics workout. Rather than fight against the urge to repeatedly hit that snooze button, I moved the phone to the kitchen so that I would have to physically get out of bed and walk to the kitchen to silence the alarm. At that point, it's closer to turn on the stove to get the coffee going than it is to get back in bed - the coffee is in sight, the bed is out of sight. That's an example of taming the morning lizard brain with the nightly Support Habit of charging my phone in the kitchen rather than my nightstand. It increases the odds of success for my Keystone Habit of getting up early to exercise. I only made the improvement after trying and failing to get up by willpower alone. Don't try to get it 100% right the first time, experiment so you can see where things break down for you, then make an improvement for the next time around.

Taking it to the next level: coaching and peer support

Creating accountability will increase the odds of any behavior change program. When you get really serious about making a change in your life, you can declare the intention and commitment to a coach or to a friend so that you are accountable to them for your results. Make the commitment visible and give them permission to ask you in the future how you are doing with the behavior change to which you committed. Accountability structures enlist the power of imagined shame and guilt at having to tell someone you failed to give emotional force to your commitments. You can feed your lizard brain with shame; go ahead and feel your cheeks getting red with imagined embarrassment to give you that extra nudge to get things done and to stay on track with your new habit stack.


FiClub recommends that members consider their finances in the context of their habits and psychology, rather than as an isolated area of their lives. That means taking and applying the knowledge of how our minds work to improve our chances of meeting financial goals. Traditional financial professionals help wealthy people manage their money, we seek to coach everyone on how to manage their money problems. Contact us if you would like to talk to a FiClub coach.

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