‘I feel some retail therapy coming on,’ my ex-boss would say when things got rough at one of my previous jobs. This was her way of coping – buying something not because she needed it, or even wanted it, but to feel better. I never knew whether her retail therapy got her in financial trouble, but it’s easy to see how that can happen to people.

Which negative habits are setting you back financially from reaching your goals? Are you carrying debt? Or does your cash get frittered away here and there without you knowing where it’s flowing or where it needs to?

What positive habits to you want to start? Saving money every time you’re paid? Holding off on big purchase until you’re sure they’re right?

The other day I was discussing with a friend how to kickstart their savings habit. ‘How do you do it?’ she wondered aloud.

How habits work

There have been huge strides forward in the last decade or so of people’s understanding of how habits work. We now have some powerful ideas on how to tweak these routines that we fall into. If you’d like to get more into it, Charles Duhigg’s The Power of Habit gives a helpful tour.

Habits follow a familiar pattern. First off there is a cue – sort of a trigger – that starts the habit off. (Though sometimes it is challenging to figure out exactly what triggers certain habits.)

Secondly, there is the routine itself – the action we take when the cue presents itself.

Finally, there is the reward we get in the end, which in turn reinforces the habit.

So with my boss’s retail therapy, the cue was probably a rough meeting (or three) with her own boss at the time; the routine was hitting a handful of shops and buying a new outfit (or two); and the reward was the relief and compensation that came with those purchases.

The cycle of cues, routines and rewards repeats itself over and over. And what propels the cycle forward is a craving for that reward at the end.

Once we’re craving that reward, we are basically programmed to go through that routine every time the cue presents itself.

Habits are not destiny

The good news, as Duhigg points out, is that habits are not our destiny. They may seem inescapable at first, and our brains do in fact store them away permanently so that they can resurface at any time. However, they can be adjusted or even replaced by other routines.

Say you regular spend on something $50 or more (insert your dollar amount here) after a hard day at work. You can set a new habit to make sure you really want to spend that: “Each time I buy something costing $50 or more, I will sleep on it overnight before doing so.” So you’re not denying yourself that item, but putting in place a habit that helps you make decisions you’re happy with in the long run.

To change up the habit entirely, we can find out what triggers it, examine what we’re really craving, and find new routines that give us the same rewards.

After all, with retail therapy for example, we’re not really craving that new outfit, we’re craving that compensation (above our salary) for having a tough day. If the shopping is breaking our budget, there should be other things we can find to make us feel better.

You can even stack your habits

But what about starting those positive habits? Since we all already have thousands of small daily habits in place, turns out one of the easier ways to start a new one is to stack it on top of an existing habit. Thanks to James Clear, it’s a thing: habit stacking.

Do you have a coffee every morning? (We promise we’re not going to tell you to kick your takeaway coffee habit!) With habit stacking, you essentially pair one habit with another. For instance, each time you sit down to drink your coffee, take a few minutes to track your spending from the day before.

Or maybe after you and your partner do the Saturday morning house clean. Each time you finish, spend 30 minutes checking in on your money goals with each other.

There’s so much potential for kicking, picking and even stacking new habits!

I’ve been wondering a lot about which habits are worth picking up – before I end up with some more I really could do without. With the right ones in place, a lot can be accomplished in life.

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