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Financial Resolutions vs. Habits

Every January I resolve to "get more focused on finances" which means "Get your sh*t together" which comes down to, "You need to fix something that's broken."


This is why I have a love/hate relationship with resolutions. If I resolve or decide to do something, especially at the beginning of a new year, it's often because I feel a lack or deficit. I think if I resolve to do such a thing or be a certain way, it will complete me in some way. I love to imagine my life after fulfilling my resolution. I hate to think that I need that something to feel whole.

FInancial Resolutions vs. Habits

Money Habits

Which brings me to my decision this year to cast resolutions to the winter winds and, instead, focus on habits. Why? Because habits are what keep us doing what we do. They can be so familiar that it never crosses our mind that they can be changed. Alternatively, we may have tried to change them and failed, and we’re not sure why.


When it comes to money, these habits can keep us stuck in how we show up for money -- whether for the good, the bad, or the ugly. If for the good, we might check out accounts regularly, pay bills on time, and have regular conversations about finances at home or at work. If bad or ugly, those habits might be around avoiding your money or, worse, abusing it as in gambling or hoarding money.


A few more examples of unhealthy money habits include:

  • Saying yes every time a check-out clerk offers you 10 or 20 percent off your purchases if you open a store credit card.

  • Buying yourself a treat after a difficult encounter or every morning after dropping the kids at school.

  • Making purchases knowing that you’ll return them.


Principle 4 of Positive Money
Principle 4 of Positive Money states that When your thoughts, feelings, and actions related to money are aligned, you experience greater ease and flow.

Financial Resolutions vs. Habits

The fourth Principle of Positive Money states, "When your thoughts, feelings, and actions related to money are aligned, you experience greater ease and flow."


If you find yourself making financial resolutions, ask yourself what habits you would need to change to gain resolve.

As G.K. Cheston famously said, “Don’t ever take a fence down until you know the reason why it was put up.” This is a good reminder that our habits serve us until they don’t.


For example, you resolve to be better about checking your accounts and putting money aside for emergencies. If so, what habits currently stop you from making this a practice? These can be habits of thinking and behaving.


There are many resources on understanding and changing habits. One I like and mention in my book is Atomic Habits by James Clear. He says that we often fail to change our habits because we try to change the wrong thing in the wrong way. If we only focus on an outcome like losing weight, we’ll likely fail. However, if we start with our identity — our worldview, self-image, etc. — we’re more likely to succeed. “Behavior that is incongruent with the self will not last. You may want more money, but if your identity is someone who consumes rather than creates, then you’ll continue to be pulled toward spending rather than earning.” In other words, you should focus on becoming a runner rather than on running a marathon.


You can read more about how Positive Money works in Chapter 3 of The Positive Money Book - 7 Principles for Living a Rich Life.


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