My husband recently read a great book titled, The Power of Habit by Charles Duhigg. And we started talking about keystone habits.
He was excited to share with me the study that Duhigg came across by two Australian researchers – Megan Oaten and Ken Cheng. They designed an experiment centered around a money management program. The participants set savings goals and tracked their expenses over a four-month period.
The findings were so exciting…
Everyones finances improved, but so did their health!
They smoked less cigarettes (15 fewer per day), drank less alcohol (two fewer beers), drank less caffeine (two fewer cups of coffee), they ate less junk food and were able to be more productive at work.
All by monitoring their spending! Money can be such a powerful tool.
“As people strengthened their willpower muscles and worked up the self-discipline to plan and track their spending, that strength spilled over into what they ate or how hard they worked” writes Duhigg.
This is called leveraging the power of keystone habits. Some habits, like financial monitoring have the power to start a chain reaction, changing other habits in their wake.
“Keystone habits start a process that, over time, transforms everything,” Duhigg writes. “It’s not that tracking your spending…causes healthier eating. But somehow those initial shifts start chain reactions that help other good habits take hold,” he writes.
So, if you are feeling overwhelmed by not knowing where your money goes or stressed about trying to pay off your debt, then all you need is one simple habit.
And the money habit that will change your life is to use cash.
Financial monitoring or keeping an expense journal is a powerful activity, but it is time consuming. Instead, at the beginning of each week work out how much money you have left after you pay your fixed bills (rent/mortgage, internet, mobile phone etc) and use only this to pay for your discretionary expenses (groceries, food, entertainment, clothes etc).
Think of it as a ‘keystone’ self-care ritual. And if you commit to it, I am certain you will start to feel more positive and in control of your money. Soon you will become very aware of where your money is going and you will start to make you more conscious and confident spending decisions.