The Habit Helper Guide
In the survey, you answered some questions about your money habits that centered around 2 principles; Clarity
and Simplicity.
Within those two principles is a 3rd - Values.
It is important to note that the term "Financial System" and "Financial Habit" are almost completely
interchangeable.
Here's how it all works together
Simple financial systems (or habits) are easy to follow because they are easy to do.
Clear financial systems (or habits) are easy to follow because they are easy to understand.
Financial systems (or habits) that follow our personal and unique core values, or produce results that support our
core values, are easy to follow because we are motivated to follow them, not because someone tells us they're
they "Smart" thing to do, but because they validate who we believe we are.
In Short
your habits and financial systems will work best for you if they are based on these 3 principles;
A simple financial habit is a good financial habit.
A clear financial habit is a good financial habit
It is always possible to find money for the things that matter most to us.
The Habit List
Old Habit: In your answers, if you said that you use multiple credit and debit cards then you have an opportunity
to simplify things a bit.
New Habit: Consolidate your cards and get rid of the ones you don't use. At most you need 3 payments systems
for personal use - Cash, 1 debit account and 1 Credit card.
Principle: A simple financial system is a good financial system.
Old Habit: In your answers, if you said that you had trouble following a monthly plan or did not have a monthly
plan at all then you have the opportunity to create more clarity (a big stress reducer).
New Habit: The easiest plan to follow is detailed and relevant. Consider changing your approach to how you plan
your spending . This will increase your control over your money and your ability to pay off debt.
Principle: A clear financial system is a good financial system.
Old Habit: In your answers, if you said that you do not tend to use equal billing and automated billing plans then
you have an opportunity to make life a little easier for you.
New Habit: Manually paying bills requires time and effort. Consider automating some of your payments. Only
automate a payment if;
i.
ii.
iii.
You can also set it up for equal payments. Do NOT automate a payment that fluctuates every month.
You are aware of when the settle up month is and always have enough money in your account to cover
the maximum allowed by the companies settle up policy.
You know exactly how much it costs and when it will come out of your account. The purpose of
automation is simplification, not to make the bill out of sight/out of mind.
Principle: A simple financial system is a good financial system.
Old Habit: In your answers, if you said that you didn't track all of your expenses in a highly organized manner
(meaning perhaps that you have many unopened bills and/or an unorganized filing system) then you have a
chance here to gain some real clarity.
New Habit: Create a solid system for filing your expense information and use it often. Filling bills and other
receipts in a systematic way helps us to feel better organized and more in control.
Principle: A clear financial system is a good financial system.
Old Habit: In your answers, if you said that you feel "out of control" with your spending and/or frequently check
your bank account balance more often as pay day comes closer, then here's a way you can start feeling much more
secure.
New Habit: Begin using personal financial software. Personal financial software will allow you to track your
expenses in a way that helps you feel more "in control" and ensure that you'll know how much you have every
step of the way.
Principle: A clear financial system is a good financial system.
Old Habit: In your answers, if you said that you make multiple purchases under $10 or $20 every month, or if you
make many "Convenience" purchases, then you have a chance to find a lot of extra cash here.
New Habit: Multiple small purchases will "nickel and dime" you to death. Try to plan your expenses so that you
make less frequent trips to the store and when you do, make sure you spend more than $10 or $20. This does a
couple things;
a) It makes you wait for those small purchases
b) It is more "real" when we spend more money, so we're more conscious about how much value that purchase is
actually adding to our lives.
The next step to this is to find a new job for that money. If paying off debt is your top priority then I would suggest
creating a debt destroyer account or jar and make the decision that any amount of money below a certain amount
belongs to that account/jar.
ie. If you primarily use cash for purchases and the limit is $20, then any bill or coins under $20 are now considered
money for debt repayment. If you primarily use a debit card for purchases, then set up a "bank the rest" type of
program (available at most banking institutions).
Principle: It is always possible to find money for the things that matter most to us.
Old Habit: In your answers, if you said that you have multiple purchases that you make on a routine basis. These
purchases range from cell phone bills to morning coffee, then you have a chance at finding a lot of extra cash here.
New Habit: Get creative with ways that you can combine these payments or trade them for smaller ones. One of
the biggest "money sinks" we have are our routine purchases that we no longer think about. It's the Latte
factor...but it goes beyond coffees.
Yes, we know that your morning coffee at Starbucks will cost you over $1200 per year.
But what about the overages caused by not being on the right cell phone plan? How much did you spend last year
in overages?
And if you wanted to get really extreme, you could save $8000-$12000 per year by changing your mode of
transportation from a car to a bike, scooter, or public, if possible and if it is worth the trade off for you.
I'm not saying you need to sell all your stuff....but if you take a good hard look at where you spend your money,
you'll see where your values really are. And if you're not happy with your debt, maybe it's time to shift your
money and use it in a way that is more in line with your values.
Principle: It is always possible to find money for the things that matter most to us.