If you’re not a natural-born saver, you might believe that the key to becoming a good money manager is willpower and deprivation. The thinking with this is that if you just grit your teeth, force yourself to forgo temptations, and record every penny, then you’ll become more responsible with your money.
The only problem with that theory is that reliance on willpower is doomed to fail. As anyone who has tried an extreme budget (or diet) can tell you, we all have a tendency to rebel against too-strict rules, even when they are self-enforced.
A better plan is to work on improving your willpower since studies have shown that practicing willpower in one part of your life makes it easier to resist temptations in seemingly other unrelated areas of your life.
Here are four non-financial habits you can adopt to become a better self-regulator.
Stand Up Straight
A study conducted by the University of Michigan asked students to maintain good posture for a period of two weeks. At the end of the experiment, researchers found that the students who had been watching their posture performed better on tests of self-control as compared to the control group that had been free to slouch.
Apparently, even small self-regulatory exercises strengthen your overall willpower. This particular habit could not only help you to become a better money saver, but it will improve your back health, as well.
Wear a Daily Uniform
One of the reasons why it’s so much harder to make good decisions and avoid temptations late in the day is because of a phenomenon known as decision fatigue. It turns out we all have limited bandwidth for making decisions. Using up that bandwidth on unnecessary or irrelevant decisions can make you susceptible to making poor choices when the stakes are higher.
That’s why many high-profile individuals from President Obama to Mark Zuckerberg have decided to adopt a daily uniform. With one less small decision on their plates, they are better able to focus their mental energy on the choices that really matter.
Embrace Discomfort
Living in the modern world means that we rarely have to feel discomforts, such as hunger, extreme temperatures, or even the bite of a pesky mosquito. That’s certainly a good thing, but it has its downsides.
If we don’t regularly experience such unpleasant sensations, worry about potential future discomfort, or the first pangs of physical discomfort, it can convince us that we can’t stand the unpleasantness.
For instance, if you fear discomfort, you might immediately purchase a sweatshirt at the ball game when the weather turns cold even though you don’t particularly want a team shirt and can’t afford the high markup. If you have a habit of embracing minor discomfort, on the other hand, you’ll realize that you can handle both the chill and still be able to enjoy yourself without being perfectly comfortable.
Exercise Consistently
Exercise is the all-purpose remedy for any number of things that may ail you, including a lack of self-discipline. In 2006, Australian researchers Megan Oaten and Ken Cheng conducted a study that offered participants a free gym membership and personal training for two months.
Those participants who regularly exercised during the two months “experienced significant decreases in perceived stress, emotional distress, smoking, alcohol and caffeine consumption, an increase in healthy eating, emotional control, household maintenance chores…[and] monitoring of spending.”
Like the good posture habit, adopting a regular exercise regimen can help your health while giving you plenty of opportunities to flex your willpower muscle.
It may seem like your money problems exist in a vacuum, but becoming a better self-regulator in any part of your life will help you solve issues in every part of your life.
How do you create non-financial habits? In what way do you notice that changing other areas of your life affects your finances?
{ read the comments below or add one }
I’m a natural born saver, but I’m also obsessed with food, so a cancer scare a few years ago had me worried about something much more important than money, namely my health. I think you’re right that “extreme budget or diet” is likely to fail, but why should this be your objective? Think carefully about what you’re trying to accomplish and devise a plan to aim just at that.
For example a diet rule of “eat less” doesn’t make sense, what you eat counts more than how much. Eat less food that has unhealthful components like too much sugar or too many calories. Eat more food that contains nutrients, fiber, and low glycemic index. It’s not rocket science to know the difference between the two. Go ahead and gorge on salad and fruits, don’t fall for the false choice of starvation vs a junk food diet. I found that eating better slowly changed my tastes so I no longer crave soda pop and snack cakes.
Similarly on spending and saving, put your willpower into what matters. The best leverage comes from stuff you set on auto-pilot so it’s not taxing your attention, for example maxing 401k contributions. Think carefully when deciding on big rare purchases, like your house and car. And don’t sign up for extra student loans expecting it’ll be easy to pay back later (believe me they will not be). What you can save on major commitments adds up to a lot more than little things like your daily cup of coffee. Don’t sweat the small stuff because it’ll drain your willpower without giving much benefit.
I have learned to apply workout habits to other areas of my life. I cycle and run and there is growing science around these fields. But instead of trying to understand the implications of every research study or experiment with every type of technology (I wear a Garmin and use a basic bike computer but haven’t yet tried a power meter for example), I grow my competency once step at a time. I also pick the brains of those who are faster and stronger than I am (plus have scientific backgrounds). And over time, I have improved. I have learned to apply these principles apply to finance: take steps that push me but don’t overwhelm me, make improvements within my reach, keep learning, and becoming more sophisticated. (And don’t think that gadgets always make me faster, smarter, or richer).