Taking advantage of life changes to improve your money habits

A small change in your routine can mean big changes in how you spend and save money. We carry out so many of our habits on autopilot or near enough, that sometimes we miss opportunities to improve our lives. Anything that disrupts our habits can be a great way to create mindfulness and allow us to reset our behaviour in ways that benefit us.

As you may know, my husband and I moved house just over a month ago. It was a horrible, stressful process but we’re very happy in our new home. One side-effect of the move is that we no longer live opposite our local corner shop. This is the corner shop where I get my chocolate. Sorry, this was where I used to get my chocolate. The nearest corner shops are now at least five minutes walk away. Now I think twice before going to buy chocolate. The extra few minutes walk means I have to want the chocolate more before I‘ll be bothered to go and get it. This is what is known in behavioural science as friction. In this case, this friction is going to be good for my blood sugar and also my wallet, because I have expensive taste in chocolate. It doesn’t have to stop me altogether, even a 50% drop in trips to the shop will make a difference given time.

Friction can work for you or against you. We’ve also moved further away from the gym and I can’t see myself restarting my membership because I know the extra distance means I’m much less likely to go. Since I’m getting a surprising amount of physical activity sorting out our new garden, I’m not so worried about that. (Also yay! More money saving!)

These are changes that happened naturally as part of the move, but this change is also a chance to reassess our day-to-day lives and find opportunities for intentional improvements. For example, we’ve reconsidered which bank account we use to pay our bills. We’ve set up joint savings for the work we’ll need to do on the house. We’re planning our finances more as a household than as two individuals who happen to be married and live together.

It’s no surprise that all the research says that big life events are the time when people often seek financial advice or coaching for the first time. Getting married; buying a home; giving birth or adopting; and approaching retirement are all big changes with obvious financial implications. As are the less happy life events, such as divorce, bereavement and sickness. Yet many people would be better prepared for these big events, both happy and sad, if they’d got advice or coaching some years before.

Similarly, waiting for a big event before you evaluate your habits is a mug’s game. You’re really just procrastinating. Instead, set a date with yourself to go through your finances regularly and while you’re at it consider your daily life and see if you can find a way to tweak a routine or habit for the better.

Would you save money if you:

• Walked a different route and avoided a tempting shop;

• Tried a different supermarket or avoided a certain aisle during your usual shop;

• Unsubscribed from a mailing list (or twenty);

• Changed your evening routine, so you’re not browsing while you’re tired and your defences are down;

• Unfollowed certain social accounts;

• Made more proactive choices about how you spend your free time, so you feel more fulfilled and connected, and are less prone to emotional spending;

• Found a way to reduce friction for your good habits, like automating payments to savings and investments on the day you get paid or using an app with a round-up function;

• Considered the big events that could be coming in your life and started working out what you’d need to make sure your finances were in the best shape possible if/when they happen.

I have another blog post about why it’s important to use friction to help you do the right thing and also a podcast episode with the science behind why we shouldn’t rely on willpower, so it’s better to design your life to avoid temptation.

What have you done to help you reinforce good habits and avoid troublesome ones?