The Happiness Formula

By Scott Spiker


The Online Magazine from First Command Financial Services

Starting Out PrintRSS

Change Your Habits, Change Your Life

By Stan Lankowitz, Contributing Writer

We are creatures of habit. When shopping for groceries, do you buy the same items every week? When driving to work, do you ever take a different route?

The way you spend money is also a habit. It’s a good bet that your monthly expense for restaurants is fairly stable. The same is likely true for everything from insurance to clothes.

Habits are helpful. They free us from having to think and focus on common activities. Remember the first time you drove a car? Nothing was habitual. You paid close attention to every detail from adjusting the mirrors to accelerating smoothly. Changing lanes was an exhilarating maneuver. Now, while being safe at the wheel, we listen to music or grab a quick bite. Using the cell phone while driving – well, let’s not even go there.

Sometimes habits replace careful thinking, leaving us stuck with detrimental behaviors like smoking, taking work home and chronically watching TV. Add excessive spending to the list. Although not commonly thought of as “dangerous,” spending habits can damage financial health.

Using credit cards is deceptive, denying us the actual experiencing of parting with our money. Although convenient, credit cards make it easy to violate a fundamental reality of money management: income must exceed outgo. What a concept!

When telling the unabashed truth, are your spending habits appropriate? Habits take root and are tenacious. Even when habits are harmful, changing them is challenging. Here’s a four-step process to change any habit, including how you spend money.


Starting Out

By Amy Riordan, Contributing Writer

Too often, people only examine their financial behaviors during times of individual or social economic distress. But to confidently plan for your financial future, productive money management must be a constant, everyday pursuit.

Pursuing financial freedom is possible by scrutinizing how you manage money and adjusting your financial behaviors accordingly. Whether you’re confident of your financial future or currently experiencing hardship, here are seven time-tested principles that will support you throughout your lifelong financial journey and help you achieve your future dreams and goals.

Remember, Money Alone Can’t Make You Happy
Although cliché, identifying your beliefs surrounding money before you pursue it will help you develop productive financial behaviors. If you believe having a lot of money will answer every problem — or guarantee serenity — you’ll experience disappointment no matter how much wealth you gain.

Your Attitudes Will Affect How Much You Can Earn and Save
How you regard money will drive how you manage money. Even though our attitudes about money are established at a young age, it’s never too late to change. Choosing to be financially disciplined will help you see the long-term implication of your choices and help you start your financial future off right.

The Most Important Factor of Financial Success is Behavior, Not Income

An estimated 70 percent of all Americans are living paycheck to paycheck — no matter how much they earn. Many find that even after they attain great-paying jobs, their financially defeating habits keep them in perpetual debt. Changing your money habits will help free you from debt and move you toward financial independence.

Using Credit Cards to Fund Purchases You Can’t Afford Is a Never-Ending Mistake
Credit cards are debt — period. Although building your credit history is important, you don’t need more than one or two to do this. Wants aren’t needs, and it’s vital to recognize the difference before you start making purchases on credit.

Now Is the Best Time to Begin Your Financial Journey, Regardless of Circumstances
Don’t wait for something bad to happen before changing your financial behavior. The power of time is your greatest ally, especially when considering factors such as compounding interest. Postponing the implementation of your financial plan could cost you a significant amount of money in the long term.

Planning Ahead Matters
If you don’t plan for the future now, you can’t effectively monitor and develop productive financial behaviors. A well-constructed plan should be tailored to your personal values and goals, and should outline a strategy with clear steps for achieving those goals.

Your Financial Journey is a Marathon — Not a Sprint
If you start now and stick with it, you’ll reap great rewards over time. Endurance, patience and discipline will guide you on your way. And even the most experienced investors sometimes need a mentor to help them make wise financial decisions.

First Command knows these time-tested principles can help you be financially secure and feel confident in your future. Yet your life isn’t stagnate. Although you follow these principles, your financial plan must continue to change as you do. Meet regularly with your First Command Financial Advisor to develop evolving strategies that change as your circumstances change, enabling you to continue to confidently meet your financial goals — no matter the circumstance.

First Command Financial Services, Inc.

Step 1: Commit to change.
The stronger the commitment to develop a new habit, the more likely is success. Listen to your language. “I should probably spend less” sounds like obligation and has little chance against a well-engrained habit. Compare that to, “I promise to spend less, and I’ll start by taking my lunch to work.” Now you’ve got some traction.

State your commitment in the positive. “I am a non-smoker” works better than “I will stop smoking.” “I spend within my budget” is more likely to be successful than “I will stop spending so much money.”

Step 2: Get feedback.
In basketball, if you want to improve your free throw percentage, wearing a blindfold is not recommended. You need feedback. The same is true when changing spending habits. Monitor your progress. Create an Excel spreadsheet of expenditures or give yourself a weekly grade.

Step 3: Practice.
Here’s where the rubber meets the road. A skill is any activity that improves with practice. With practice, success is inevitable. Avoid self-reproach. When you buy your third “little black dress” or 20th Xbox game, instead of beating yourself up, forgive yourself and continue practicing.

Step 4: Celebrate progress.
Even small incremental steps are worthy of celebration. Having only one Starbucks a week, paying more than the minimum monthly payment on a credit card and increasing your savings deposit are victories to cheer about.

Break out of self-defeating patterns. Practice these four steps. Change your habits and change your life!

About the author

Stan Lankowitz, M.Ed, has been a psychotherapist and life coach for more than 30 years. His clients include business owners, corporate executives, directors of non-profit organizations and individuals in all walks of life. To schedule a free, one-hour session, e-mail him at Stan is not affiliated with First Command Financial Services, Inc.