Kim’s Books

Are your habits serving your true self?

We all have habits that don’t serve us. I eat too much sugar. But what about money habits?
Money habits can be about how you think and feel about money. It can also be what you do with money.

Your money habits have been shaped by your history. Will these habits enable you to become financially free, or will they steer you into a never- ending money trap?

Bad habits feel good – like instant gratification. That muffin may taste great for 30 seconds, but what about your overall health goal? That expensive vase or new car may look wonderful and give you a temporary high, but what about your long-term saving goal?

Good habits, on the other hand, may not give you immediate joy, but the ultimate outcome feels good.

So, when you’re thinking about your future self and visualising what your life will look like if it turns out well, it’s easy to see the value of taking actions with long-term benefits. We all want a better life for our future selves, but when the moment of decision arrives, instant gratification usually wins.

As a general rule, the more immediate pleasure you get from an action, the more strongly you should question whether it aligns with your long- term goals.

James Clear says that the ‘costs of your good habits are in the present. The costs of your bad habits are in the future’.

Make sure your habits reflect your values and the vision you have for your future self.

Page 158 – 159 of Midlife Money Makeover

Take small steps

Habits are the small, repeated actions you take. Too often, we convince ourselves that massive success requires massive action. That was always my approach to exercise and running. I would put up a huge goal and really tackle it. James Clear explains it this way: success is the product of daily habits – not once-in-a-lifetime transformations.

When it comes to money habits, I’ve consistently seen how clients who put in place smaller, easier habits and apply them, succeed. They succeed more than the ones with big, audacious goals that are just too hard to stick to.

Habits are the compound interest of self-improvement. In the same way that money multiplies through compound interest, the effects of your habits multiply.
Making a choice that is 1% better or 1% worse than your previous action seems insignificant in the moment, but over the span of moments that make up a lifetime, these choices determine the difference between who you are and who you could be.

James describes it as a simple two-step process:

1. Decide the type of person you want to be.
2. Prove it to yourself with small wins.

I want to remind you of the difference between a good idea and a habit.

Page 161 of Midlife Money Makeover