Before we jump into talk of financial habits, let’s take a second to be honest: How many of you have been counting down the days until the kids are back in school? (Australians and Kiwis, you’re off the hook on this one since your kids are well into their school year.)

In Canada, most kids will be back in the classroom by week’s end. And everywhere there is a collective sigh of relief from parents.

Of course we love our kids, and summer holidays are great. It’s the before, after and in-between bits that can occasionally test your patience and your stamina.

Here’s the cool thing about this time of year, though: September feels like a new year for adults, too. It’s a time of renewed commitment, fresh starts and optimism. If you’re not on track to accomplish your goals for 2019, you still have four productive months ahead to move the needle – loads of time to build supportive financial habits.

That’s the good news.

Ah yes, but…

How do you plan to ensure that the four remaining months will be a success with respect to your goals? More energy and commitment are terrific, but the secret to making progress lies in the details. Ah yes, those financial habits.

Let’s wind back the clock to January. What did you hope to accomplish this year? Where were you financially?

Did you say something like, “This year is going to be different. I’m going to get it done” – whatever “it” is?

If you’ve checked all your accomplishment boxes this year, you’re good to go. Stop reading right now and carry on. Your approach is working beautifully.

If, however, you wish you had made more progress so far, I get it. I’m with you. While I made significant gains in some areas of my life, others are underwhelming to say the least. I’ll share one of those failures in a second.

Here’s what I’ve learned about disappointing results: If you proceed with the status quo, you will continue to get your current results.

Something has to change to get you to your happy (or happier) place, and this is the perfect time to tackle that.

Forget diamonds – go for crystal

Whenever I have failed to accomplish an important goal, my post-disappointment analysis usually reveals that I have not been crystal clear about what I wanted to achieve.

Saying “I want to get healthy” isn’t a clear goal. “Get to X% body fat” is crystal clear. So is saying, “I choose not to eat sugar and processed food.”

Deciding to get your finances in order isn’t clear. Choosing to create a system to capture receipts weekly and input your expenditures into a tracking system, which you review monthly, is very clear.

Choose whichever goals resonate for you, but take the wiggle room out them.

What specifically do you want to accomplish with your finances and/or your life, from September to December of this year?

Got it? Great, let’s keep going. That was just the beginning.

“You get what you repeat”

Over the years, I have learned that you can have all manner of goals, mighty and modest, but if you don’t have the systems and habits to back them up, they eventually feel like pipe dreams.

In his thought-provoking book Atomic Habits, author James Clear says this:

“… outcomes are a lagging measure of your habits. Your net worth is a lagging measure of your financial habits. … weight is a lagging measure of your eating habits. … knowledge is a lagging measure of your learning habits. Your clutter is a lagging measure of your cleaning habits. You get what you repeat.

I believe that you do not rise to the level of your goals. You fall to the level of your systems…. Your habits are shaped by the systems in your life.”

The truth of that hits like a brick to the forehead, doesn’t it?

Your outcomes, with very few exceptions, are the result of your habits. If an area of your life has been frustrating the socks off you, look no further than your habits. 

Want better habits, especially financial habits? Then, according to Clear, create systems that support healthy behaviors, which will develop into habits when repeated often enough to become automatic.

What does that mean for your crystal clear goals for this fall? It means that you now have to identify behaviors that would lead to the desired outcomes.

How it works with financial habits

Let’s say that your goal this fall is to create a $1,000 Emergency Fund in a High Interest Savings Account (HISA). To get this done, you need to save that money and divert it to the savings account.

The first step might be to break down the total by month: You need to save $1,000, divided by four months remaining in the year, which means saving $250 each month.

If you have the extra cash lying around at the end of the month, the next steps are pretty easy. But let’s assume that you don’t typically have $250 left at the end of the month. Perhaps then you create a rule/habit that goes something like this: “Every time I’m paid on a semi-monthly basis, I will deposit $125 in my HISA before any spending happens. To ensure that I don’t forget, I will set up an automated transfer from my chequing account to my savings account.”

That step, or habit, will ensure that the savings account grows to the desired level by the end of the year.

Now you need to solve the remaining cash flow issue. If you rarely have money left over at the end of the month, it means you’re spending every penny each pay cycle. That needs to be amended to make up for the savings.

Stacking financial habits

Perhaps you create the following stacked habits, as Clear calls it when you layer one habit after the other:

1. After the money goes to my savings account, I set money aside to pay for essential costs and obligations – rent/mortgage, food, utilities, car payments, debt payments, etc.

2. Once money for essential costs has been set aside, or accounted for, I calculate how much is left over for “other spending” and I use this total to guide my spending for the rest of the month.

3. Whenever I want to buy something, I check my spending tracker app to ensure that I don’t spend more than I allotted for “other spending”.

Pay day triggers the start of this habit cycle, starting with automated savings and using a tracking app to facilitate decision-making with respect to spending.

A friend of mine uses this approach to great success. When she divorced and became a solo parent, this system helped reduce the stress of suddenly becoming responsible for all financial decisions. It helps her to stay on top of her spending and ensures that she is building a strong financial foundation.

She uses an app – My Weekly Budget – that uses a system based on the concept of traffic lights to show where she’s at in her spending for every category. If she’s in the green, there are no worries. If, however, she shes a yellow light and it’s still early in the month, she knows she needs to be careful about her spending until the next payment cycle.

How I’m applying this to fitness

One of the areas where I have not met my goals this year is in fitness. I used to have three-pack abs (I never managed to get to six, but I was OK with three!) and a backside you could bounce a dime off of. I managed this with careful eating, playing a lot of sports, and regular-ish trips to the gym.

Then I tore an ACL, which required reconstructive surgery. After a lengthy recovery period, that knee felt pretty much bionic, but the other one started to complain. After a scare on an Ultimate Frisbee field, I figured it was time to play it safe. I dropped the sports and focused on the gym. By “focused”, I mean theoretically; I rarely went.

I had a membership at a fabulous gym, which offered hard-core classes and hot yoga. It was perfect, except for the fact that it required three quarters of an hour of driving, which never seemed to be convenient given my work schedule and unpaid side hustle as a taxi driver for my kids. When reviewing my finances, I realized that each hour-long class cost me more than $35, since I was only going a couple times a month. So, I dropped the gym.

In January of this year, I resolved to find a hot yoga studio. It took a while, but I eventually found a great place. In the last month, I’ve been twice. OK sure I’ve been away on holiday; but really, that’s an excuse. I could rationalize til the cows come home. Bottom line? I have a lousy system in place to ensure my aforementioned backside makes it to the yoga studio three times per week.

Vanessa the Hard-ass

Here’s what’s crazy: I feel AMAZING every single time I go. At that particular studio, there’s an instructor named Vanessa who looks and sounds so pleasant. Such a nice voice. Such a lovely smile. Beneath that approachable exterior, though, lies a relentless taskmaster.

She works muscles I didn’t know existed.

When I think I’m going to die, she asks for more.

She makes me sweat buckets – seriously, I look like I’ve just showered by the end of her classes.

And I love every minute of it.

My abs look and feel strong. It’s doing the job for my backside, too. I love Vanessa the Hard-Ass.

So why don’t I go more often?

Systems failure. I do not have systems in place to facilitate good behaviours, which will lead to good habits. In the absence of systems, life and excuses get in the way.

My habit development plan

Here’s what I’m changing moving forward, based on Clear’s ideas about creating lasting habits:

1. As soon as I get to my computer Monday morning, I book three yoga sessions for the week based on my schedule.
2. When the sessions are booked, I open my calendar and input them in red blocks. Red blocks may not be altered. Those blocks are now committed.
3. On yoga days, I place my bag and yoga mat by the garage door before I head into the kitchen for breakfast.
4. After the yoga class, I place a green check mark on my calendar to track my progress.

The above system makes the desired behaviours easy to accomplish (everything is ready and the time is booked), obvious (can’t miss the stuff waiting for me by the door and I don’t want to break the series of check marks on my calendar), attractive (I love going to hot yoga), and satisfying (it’s rewarding to see myself becoming more muscular, plus I feel great afterwards) – which are all key to ensuring success, according to Clear.

I’d love to chat some more about habits and systems, but I have a yoga class to get to. You’ll be proud of me – I’ve even booked a yoga class during an out-of-country conference I’m attending later this week, plus a HIIT class (high intensity interval training) class for good measure!

Don’t worry, we’ll be talking a lot about systems and habits in this season’s Women’s Money Group workshops, which starts in September.

Your homework: Shoot me an email to let me know which goal you’re going to tackle this fall and one habit that you will create or amend to help you get there.

Let’s do this together. I look forward to hearing from you.

*Photo by Drew Beamer on Unsplash