How To Build Good Money Habits That Stick

It’s custom to say that people “develop” good habits and “fall into” bad habits. I don’t buy that into that way of thinking. I believe that a habit is a habit and it’s no more difficult to form good habits than it is to form bad habits.

To develop good habits, you simply must adopt the right practices that form good habits and practice them until it becomes second nature.

So, how do you do that?

You must go back to your roots. You see, who we are today is a result of our repetitive behaviors. These behaviors are anchored in the beliefs we have about ourselves. And all beliefs are simply the same thoughts repeated, over and over again. This is where the phrase – “you are what you repeatedly do” comes from.

Therefore, all of your habits came about because you first adopted the beliefs behind them as truth and then secondly, because you took action on those beliefs.

For example:

If you believe that it’s impossible for you to save money (your truth) and if you then spend (your action) all your money, you have essentially cultivated the bad habit of not saving to the point that it is now who you are. You’ve created a track into your sub-conscious that you will replay over and over like a song every time you think about saving money. Your subconscious mind will then be on auto-pilot and will just take over for you each time, playing your “non-saving” track.

That is, until and unless you erase the track and record a new track.

So, how do you do that?

By associating with a different truth. The opposite truth.

You see, to change a bad habit to a good one and make it stick, you must first disassociate yourself with the bad habit and then identify at a personal level with the good habit.

Here’s why: If you identify as the type of person who has the good habit, you’ll take actions that support that belief. Pop quiz – do you think Warren Buffett and Bill Gates would identify themselves as being bad with money? Of course not. They would self-identify as being very good with money and guess what? They are! Managing money well is who they are. It’s a part of them.

The first step in associating with a different truth is to identify the limiting beliefs you have today. You identify these limiting beliefs by first knowing what goal must accomplish or what I like to refer to as your demand. After you know your goal, ask yourself which actions do you perform on a regular basis that hold you back from achieving that goal?

For instance, say you have a goal of getting out of debt, but you also have a bad habit of impulse shopping with your credit card. That habit is obviously limiting the achievement of your goal.

The second step is to identify the signal or cue for your limiting belief. Put another way, what is the trigger that sets your bad habit in motion? Triggers can come in many different forms:

Location – Is it when you visit the mall?

Time – Is it the holiday season when all the sales are on?

Other People – Is who you are with influencing you?

Emotion – Is it based on how are you feeling?

The next time you catch yourself performing that bad habit, take second and look at these triggers. You’ll eventually notice a trend. Pay close enough attention and you’ll eventually see a pattern.

The third step is to identify the reward for your limiting belief. What is it that you get from performing that bad habit? For some reason, it’s bringing you pleasure. But just because something brings pleasure, doesn’t mean that it’s good for you.

For instance, buying and wearing new clothes may make you feel good about yourself temporarily. But the pleasure is fleeting as the clothes lose their “newness” over time and then there are also negative consequences, like going further into debt. Take a reality check and ask yourself these questions – What good feeling is coming from this limiting habit? Is that good feeling permanent or temporary? Why do you keep doing it?

The fourth step is to find a new action. Once you’ve found your cue and your reward, the final step is to replace the negative action, with a positive one that gives you equal pleasure. For example, if your goal is to be financially free, then you must derive pleasure from the act of saving money and seeing your bank account grow instead of deriving pleasure from the act of spending money.

They key to doing this is framing your habit in relation to your big goal. Ask yourself these questions:

Is what I am about to do bringing me closer to achieving my goal or pushing it further away?

Is this the same type of behavior that has me where I am today?

Am I just repeating a habit of failure again?

Would the successful people I know of do the same thing?

Too often, it’s easier to just act on impulse and not do this type of reflection. But I can tell you that successful people have this type of self-talk all the time. They rule their mind versus their mind ruling them.

Identify with a new truth about money. Each time you are faced with performing a bad money habit, tell yourself this – “I’m the type of person that manages money very well” (new truth). Then go manage money well (new action). This will change your “money track” and lead you to new beliefs and better habits.

So go ahead, try picking one thing you’d like to change about your money beliefs. Then come up with your own “I’m the type of person that _____” statement. Make it your mantra. Put it on your fridge, nightstand, bathroom mirror and watch yourself transform into a new person.

Habits can make or break you. Break the habits that can break you and develop good money habits that stick and help you achieve your goals.

Be free. Nothing else matters.





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  • homebase

    I have always dreamed of financial freedom in my life but I just end up going and going through the same process that fails in the end,this blog will help me a lot reviving my failed plans. Thanks Monty! 🙂

  • Ayman

    Thanks Monty. I really like this and your blog.

    • Monty Campbell

      Thank you Ayman.

  • Param Baig

    This article is very enlightening. I’ve been needing this for some time to bring fundamental changes in my life. Thank you for sharing this.

    • Monty Campbell

      Thanks for commenting Param. Glad it resonated with you.

  • Cyn87

    Hi, nice to find this site. You reminded me of something I read on goal setting called be, do, have. The article said that most people focus on the have: new car, a particular weight. It is better to focus on the be. This is similar to your statement of “I’m the type of person that…”

    • Monty Campbell

      Hi Cyn87,
      Well put. Focus on becoming the person who achieves those types of goals and sure enough, you’ll do the same.

  • Pete

    Thank you Monty. This has come at the right time. I am on the same old treadmill wanting to get off and get the life I want. Today is day one to start using your ideas.

    • Monty Campbell

      Thanks Pete. Best wishes to you on your new start.

  • EM

    Thank you for the insights. This is a different way of thinking about obtaining goals I have and have failed to accomplish. This is a better way of motivating myself. I need to re-program my thought process now and make this work for me!

    • Monty Campbell

      Yes. We all have “mental tracks” that we replay constantly. It’s a matter of making sure they are the right tracks. Thanks for commenting EM.

  • Dane

    I enjoyed reading your article and I think this framework is very insightful, but I’d like to know if you have any references to any research on this? Is this science or your experience?

    • Monty Campbell

      Hi Dane,
      It’s a little of both. If you want to read more material like this, then read Psycho-Cybernetics by Maxwell Maltz. I think you would enjoy it.

  • Alton

    Thank you again for an inspiring post which hit the spot! You’ve hit the nail on the head for many, myself included, whom have struggled to stay motivated to achieve our goals only to regress and give into bad habits.

    • Monty Campbell

      Thanks Alton. Glad you liked it.