As a Financial Counselor, every client I work with wants to change something about their financial habits. Whether the goal is spending less, saving more, budgeting better, or reducing debt… it all requires change. Change is not easy, especially when it revolves around giving something up, but with the right tools it can become more manageable.
What is Your Reason for Change?
Knowing why you want to change can bring you motivation. If your goal is to spend less, ask yourself why you want to spend less. Is it so you can increase your savings? Reduce debt? Stop the overdraft cycle? Write these things down and put them where you can see them. Whenever you are tempted to spend, use your credit card, or pull money out of savings, read your reasons for wanting to change. This will help you resist spending.
Another question to ask yourself is what is driving the behavior you want to change in the first place. When you overspend is it because you are upset and buying something makes you feel better? Sometimes making a purchase can feel like we are taking action to solve a problem, but this rarely works. Case in point, every time my daughter would have a problem with a behavior when she was younger, I would buy a parenting book. Seems like a great idea, right? Except just buying the book didn’t change anything on its own. I had to read the book and apply what I learned in order to facilitate change.
Ambivalence and Change
Sometimes we know we need to change, but at the same time, we don’t want to change. How can you resolve this? Acknowledge it. If you are feeling sad, anxious, angry, or restrained by your new goal, acknowledge that feeling and then let it go. We take on habits because they meet a need within us. When people smoke a cigarette or have a drink, it temporarily calms their anxiety. In the long-term, these habits can create added stress. The same applies to finances.
“If you take away a bad habit and don’t replace it with something good, it won’t be long before a bad habit is back in your life.”
— Ryan Nicodemus
Reinforcement Can Help You Change
Reinforcement goes all the way back to Psychology 101. It is one of the most effective ways to increase a desired behavior. There are two types of reinforcement: positive and negative.
reinforcement is giving someone something they like in
response to a behavior: you spent 20% less this month than last month – you
have $200 to go towards your trip!
- Negative reinforcement is taking away something that the person doesn’t like in response to a behavior: you spent 20% less last month and had no overdraft fees in your checking account!
Reinforcement frequently gets confused with punishment, but they couldn’t be more different. Punishment is used to decrease a behavior: you were speeding, so you got a ticket with a big fine. Research shows that while punishment may deter a behavior for the short-term, it does not have a lasting imprint like reinforcement does.
Next time you spend more than you want, don’t punish yourself — think about how you can reward yourself for sticking to your goals, or celebrate that lower interest rate. Consider rewards that don’t involve spending, such as leaving the chores to catch a free movie in the park, going for a hike, taking a bubble bath, sleeping in, taking a trip to the library for a new book, visiting a free museum or meeting up with a friend for a walk in the park.
“Failure is not falling down, but refusing to get up.”
— Mary Pickford
As I said at the beginning, change is not easy. We can be conflicted about it, which can make us hesitant to get started. So, what can you do?
- Figure out why you want to change.
- Acknowledge your feelings, your “falling downs” and your successes.
- Don’t punish yourself for falling down and be sure to give yourself lots of positive and negative reinforcement when you get up!
- The longer you stay on the path the closer you will get to your goal.
If you need some help identifying a starting place, LSS Financial Counselors are here to help. Get started today!
Author Shannon Doyle is an LSS Financial Counselor.