We do things the way we do them.
My morning routine is almost identical everyday, as is my evening routine.
My wife and I have very structured routines with our kids, which is good for them and for us.
Humans are creatures of habit. We’ve got Monday Night Football, Taco Tuesday, and church on Sundays.
Some habits are productive and serve us, and some are negative and hurt us.
When it comes to how we handle money, we most certainly have habits and patterns we follow. Major breakthroughs can happen when we become aware of our patterns and consciously work to nurture the good, and get rid of the bad.
I want to share a framework which will help you better understand your money behaviors, which will ultimately improve your overall financial situation.
Here’s what we’ll cover:
- Your current patterns
- Achievement versus identity
- Why do you want it
- Your spending and cash flow goals
- Making it real
Let’s get started
Your current patterns
If you keep doing what you’ve always done, you’re going to get what you’ve always got.
Is there anything truer than that?
Einstein famously said “Insanity is doing the same thing over and over and expecting different results,” and it’s something I’ve certainly been guilty of.
So why does it happen to everyone?
Our brains and bodies want to keep us safe. They crave the predictable. They crave patterns.
In order to break free of patterns that are keeping us “safe,” we need to know what our patterns are.
What are your money patterns? Spend some time thinking about your daily routines and habits.
- Aside from your essentials, are there things you’re always spending money on? Are there things you refuse to spend money on?
- Why do you do the work you do? Is it out of necessity, or do you like it?
- Do you stay in career roles for certain amounts of time?
- What are your patterns around entrepreneurship, if any?
- Are you saving and investing money? Why do you make those savings and investing decisions?
- Are you a financial risk taker?
What other money habits and patterns can you identify?
Achievement versus identity
Why do we relapse after making a positive change?
Why do people experience a sense of loss or even depression after accomplishing something great?
It’s because they reach the summit, and realize there’s no higher place to ascend to.
This is the problem with most goal setting. It’s why focusing on your identity over achievement is a key to long-term, sustained success.
I grew up in a family without a lot of money. In fact, we lived paycheck-to-paycheck my entire childhood and my mom still struggles with her finances.
Once I graduated college and entered the professional world, I also struggled with money for many years. I thought I was bad with money.
Today, that’s changed.
I began thinking of myself as someone who was good with money. It was an important mindset shift that became a behavioral shift.
I am good with money.
I make great financial decisions.
I’m a good steward of my money.
What are you?
Figuring out what you want your identity to be is essential to you reaching and sustaining your spending and overall financial goals.
Paying off all your credit cards, and then running them back up sucks.
Living the rest of your life as someone who is great with money is awesome.
Fill in the blanks:
Don’t overthink this. Don’t judge your answers. Write down what you want to be. Make it aspirational. Make it what you’re going to become.
I am ______________.
I am ______________.
I am ______________.
Why do you want it
You wrote down what you want to become; your identity with money.
Now, let’s talk about why.
This is your reason for wanting to change your identity. Just as before, I want you to be honest with yourself about why you want what you want.
If it’s, “I don’t want to be on my partner’s bad side,” great!
If it’s, “I want to feel in control of my money,” awesome!
Whatever your reason for reading this and for thinking about your cash flow goals, write it down now.
You’ll revisit this whenever your brain tries to pull you back to familiar patterns.
You’ll revisit this when you try to sabotage your own success.
You’ll revisit this when some external force tries to make you feel less than, or to diminish your efforts.
Your money goals
You wrote down your identity.
You wrote down why you want it.
Now, let’s talk about some actions you’re going to take in service of your identity.
We all know how important goals are. We’ve all heard that having goals is essential, and that writing them down dramatically increases our chances of achieving them.
While I’ve known this to be true for most of my life, it took me until 35 to actually do it.
So whether you’re like me, or you’ve been in the habit of writing goals for a while, we’re going to dig in and clarify and crystallize our goals.
What are your money goals?
Take all the time you need to write them down.
Next, let’s apply the SMART acronym to each goal- Specific, Measurable, Attainable, Relevant and time based.
For example, if a goal is to start saving money, how do we apply the SMART framework?
Is saving money specific? Yes.
Is it measurable? It can be and needs to be. Let’s say I want to start saving $100 a month.
Is saving $100 a month attainable for me? Yes, I believe it is.
Is saving $100 relevant to my overall desire to be financially successful, yes.
Is it time based? I need to give myself a deadline to start saving the $100; could I do that in two months? Yes, I believe I could.
So, instead of simply saying “I want to save money.” I’ve given myself two months to start saving $100 a month. I have a lot more clarity around this goal.
You can access our Goals and Values Courses at no cost.
Making it real
How will your new identity and plan survive it’s collision with reality?
Mike Tyson said “Everyone has a plan until they get punched in the mouth.”
It’s really important to come up with a plan for how you’re going to handle adversity.
Why?
Because you’re going to encounter adversity and the last thing I want is for you to slip back into your old patterns.
When you prepare for how you’re going to handle challenges in advance, you’ll move past them a lot more easily.
Think about it like this; how do you think Serena Williams or Tom Brady handle it when things don’t go their way? Do they Netflix and chill for five hours, or do they do something constructive?
How do Oprah or Jeff Bezos handle setbacks? Do they engage in retail therapy, or do they pivot to something positive?
I want you to think about your triggers.
When you find yourself wanting to engage in negative behaviors (retail therapy, binge eating, drinking, or zoning out on screentime), dig into it and identify what led to that impulse.
Once you’ve figured out what triggered the behavior, or desire, have a list of things you’ll do instead.
For example, when you’re triggered by something, you’ll be for a 10 minute walk, read five pages of a book, or call your best friend.
The idea is to replace negative coping behaviors with positive activities.
Conclusion
Like opinions, we all have patterns. Because money plays such an important role in our lives, the more we can dig into our financial habits, the better.
Major breakthroughs can happen when we become aware of our patterns and consciously work to nurture the good, and get rid of the bad.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course.
Connect with one of our Certified Partners to get any question answered.
Stay up to date by getting our monthly updates.
Check out the LifeBlood podcast.
If you’d like help getting on the same page with your partner, check out our Same $ Page Course.
If you’d like to help your kids get good with money, check out our Teaching Kids about Money course.
LifeBlood is supported by our audience. If you purchase through links on our site, we may earn an affiliate commission. Learn more.