Why are my friends and family so miserly with money even though they have acquired enough of it? It’s because being good with money is a habit, and as such, it doesn’t turn off. The trick to getting better with money is to create good money habits. Here’s how to get better with money in the new year.
The Power of Good Money Habits
Charles Cooke in Playing the Piano for Pleasure writes:
…when you decide to acquire a habit where none existed before, the new habit must function at first, for a little while, from power supplied by you. This is the stage where we have to make a strong conscious effort, even to the extent of a sensation of spiritual pain. But in a surprisingly short time the habit begins to develop its own momentum; and finally we get a sensation of spiritual pain if we don’t exercise the habit. Furthermore, the period during which a habit functions under its own power is infinitely longer than the initial period when it must function under your consciously supplied power.
Basically, the hard part is developing the habit. But once you establish the habit, it’s hard NOT to follow through. And you may never have to exert self-control to follow through on the habit ever again. So with self-control for say 66 days (the average length of time to build a habit), you may never have to work at it ever again. So if you commit to two months of frugality, you might be set for life. Seems like a pretty good investment, right?
“When I’m Rich, I’ll Be Different”
Every now and then, someone will look at a rich person and say, if I had all that money, I would do X, where X is not something that the person currently does now. And I think, no you won’t. Because money doesn’t change you. Your habits change you.
Well, I’ve seen posts where people wonder if they’ll have to be “frugal forever.” It seems like people are wondering if they’ll always be miserable clipping coupons or comparing prices. What I learned from these anecdotes is that there is no end to frugality. I’m not saying it’s an endless treadmill of counting pennies, but if you get into certain money-saving habits that develop over years, you don’t or can’t turn them off even when you gain wealth. Think of it like a train – you spent all this time getting it going that it’s hard to stop it. You’ve built these habits for life.
You become what you continually do. If you continually choose buying certain items, you will start to value those kinds of items. We value the items we have. If you continually choose to go without certain items, you realize you don’t need those items.
Hunger Pangs of Frugality
I haven’t done many diets because I hate the idea of restriction. But one diet that has stuck is the “one meal a day” diet. For me, it’s easier to minimize the overeating temptations. And my body has adapted so I’m only hungry once a day. Eating 3 meals a day now seems difficult.
My spending habits are similar. I know a lot of people buy something from Amazon every day or go grocery shopping every day. To me, that’s a recipe for overspending. There’s always more stuff to tempt you to overspend or overeat. Instead, I shop very infrequently and buy in chunks. The fewer opportunities to spend money means the less I spend.
In the beginning, you’ll feel like you’re deprived. You’ll want something from the grocery store but will have to make do with what you have at home. But the upside of ignoring your every desire is that 90% of the desires will go away and often quite quickly. And rather than having a lot of products that you can barely remember desiring, you’ll have a fat checking account.
How Frugal Habits Change You
Once you develop the frugal habit, you’ve changed something about yourself and your goals. The positives are that it only gets easier to save money because you will find it second nature and you will want to do it. It’s like flexing a muscle. It becomes less awkward and then it just becomes second nature. The negatives (possibly) are that you have fundamentally changed what you value and how you live your life. You may never get that designer wardrobe because you have realized different goals in life.
The other option you have is to get the designer wardrobe, the fancy vacations, the upscale apartment. The truth is that all the choices you make at the beginning of your career and all the ones you are making on a daily basis are creating the habits you will get used to.
The More You Act Frugal, the More You Are Frugal
Many people think it requires a change of your mind and self-control to save money. It can be, but if you just act like you’re frugal, you might just become frugal. The habit might change you.
As I’ve heard multiple people state about all manner of sports, you go in the direction that your feet are pointed. If you’re saving, the more you’ll save. On the other hand, if you’re geared towards spending, the more you’ll spend. The more you do something, the more you’ll value it. The less you do something, the less you value it.
It’s the habits, the things you do everyday, that will make you into the person you will eventually become. And it’s only much later that you realize what you decided you valued, because that’s the person you became. It’s the habits that change you, not the money. It’s never the money.
Conclusion – How to Get Better with Money In the New Year
Experiences don’t change you. You change you.
It’s a New Year. While you think about making a new you in the new year, think about making new habits. Make a commitment to a new financial habit this year. Shop less. Save more. Pay down more debt. Try it for 66 days. And then maybe you’ll just coast for the rest of your life, patting yourself on the back for the sacrifices you made in 2021 that led to your awesome future life.
Happy New Year.