Why It’s Hard to Change Financial Habits

They were an easy-going couple who rarely squabbled—UNTIL he suggested they create (and live by) a budget. Each time he gently brought up the subject, she got defensive. He walked away muttering to himself.

They remind me of a story I heard John Maxwell tell. A friend showed him a list of New Year’s resolutions: be nicer to people; eat nutritious food; be more giving to my friends; be less critical of others. 

“Think you’ll be able to keep them all?” Maxwell asked.

“Why should I?” the friend shot back. “They’re for YOU!”

We love the idea of change…as long as it involves someone else! 

This tendency is at work in our financial lives. The couple I mentioned could find financial freedom and fulfillment of their dreams through a budget (or “spending plan” as I prefer to call it). But that would require change. And we humans resist change for at least four reasons.

  • Change feels abnormal. 

If you’ve ever tried to replace an old habit (like a bad golf swing) with a new one, you know it feels awkward. Try putting on your shirt using the opposite arm you normally put in first. Many people find this exercise nearly impossible. If that’s true, think how hard it is to change deeply ingrained spending patterns.

  • Change is risky. 

What’s the risk in living by a pre-determined spending plan? The perception is that you risk losing your freedom when you submit to the taskmaster known as a “budget.” That mean old budget “boss” won’t let you do any of the fun things you want to do. In fact, it will force you to do things you don’t enjoy!

  • Change takes time. 

Change doesn’t happen overnight. You won’t typically see results right away. Start living by a budget and you may not notice any tangible benefits for months. This is why you must have clearly in your mind what the long-term reward is. Designing and implementing a spending plan is work…hard work. But if you stick with it, it is incredibly rewarding work. 

  • Change is costly. 

In the case of my couple friends, creating and living by a spending plan will take time and rob them of some temporary conveniences (e.g., cooking at home instead of eating out). But that change will repay them in more ways than they can imagine. They’ll end up with more savings. More options. More peace of mind, 

This is the great exchange, and seeing the long-term payoff can provide the motivation to follow through with the hard, day-to-day work of a spending plan.

What does all this mean to you? Let me answer that by asking you a question: What aspect of your financial life needs to change? Perhaps YOU need a spending plan. Or, you’re struggling with debt. Or you know you need to be saving more. And maybe, like the couple above, your spouse and you are not on the same page?

If you’re not seeing eye-to-eye, here’s how you can be a positive influence without nagging or being pushy and overbearing.

  • Be trustworthy. If you’re urging your spouse to make a radical financial change based on your supposed financial wisdom, ask yourself: What is my track record when it comes to “financial wisdom”? If it isn’t so hot, don’t be surprised if your spouse puts your “we need to start ___” idea into the trash can with your other half-baked ideas. 
  • Set an example. Trust is inexorably linked to what we do—not what we say. Would you trust a dentist who didn’t floss? How about an out-of-shape aerobics instructor? 

Take our spending plan example. If you exercise primary control over certain budgetary items, how consistently have you reigned in your spending in those areas? Faithfulness here is key to your spouse trusting you with other bigger financial ideas. 

  • Focus on what you both want. It isn’t change we want. Rather, we want the benefits that change can bring. So, start with the things you both want. Then realize that getting those things will require change. Max De Pree said, “In the end, it is important to remember that we cannot become what we need to be by remaining what we are.”

My guess is that something in your financial situation needs to change. If you want to be an influence towards that needed change, start modeling that change in your own life. 

And if retirement planning is one of the areas where you need a better outcome, I invite you to use this link to take a free, 5-minute quiz. This little RISA test (Retirement Income Style Awareness) is an ingenious tool that can help you begin to figure out—based on your unique “financial personality”—the optimal plan for you.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

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