The Force of Habit

Last week, I ordered a chick pea and kale wrap for dinner. I know, I know. A bit rabbit-ish. Then came the option of fries or salad. Isn’t that one a bit obvious? Who would order the healthiest thing on the menu and then pair it with a basket of fries? But man, the fries looked good. Oh well. Salad it was. And just a glass of ice water to drink.

To the outsider, the dinner looks a bit Spartan — pretty bland fare to say the least. Who would pass up the bacon poutine for a dinner like that? Did I lose a bet? Was I being punished for something?

No. It’s a habit.

How to build a healthy food habit

If I can shift my mind from what looks tasty to what my body needs, some surprising things happen. My cravings want more kale, more chick peas and more Brussels Sprouts. OK, kidding on that last one. But you get the idea. It’s all about forcing a new habit until that new habit forces you into good. It’s just 30 days of adjustment and the new stuff actually becomes tasty! Why a glass of water? Because after a few weeks of just water, anything else is too sweet. And after all, something like 60% of our body is water. So, we need more of it! If 60% of our body were Diet Coke, then we would need to replace the Diet Coke that we lose with sweat. See my point? The exception, I’d say, is a good glass of Malbec. But I was headed to the gym that night and needed the water, so the wine would have to wait.

My habit keeps me fit

Working out is similar. A few days without running, and the first km is painful. Not painful like a session with an amateur acupuncturist — more like the “why am I here?”, and “I wonder if my bed is still as cozy as it was when I left it?” kinds of pain. But many of my rough-starting runs turn out to be my favourite ones. If I can push past that first kilometer, my stride smooths out, thoughts wander, and the kilometers glide by. If I log a few weeks of 3 runs a week, I can’t do without them. Take a couple of weeks off and the open road just does not call me. Even if it did, I wouldn’t pick up. My energy levels drop, and sleep becomes evasive. It’s just as tough to get the running habit restarted.

Personal finance is driven by habits too, and they work the same way as the eating and running ones. Take a trip to a mall and try to return empty handed. That’s what I thought. Get into the pattern of spending within a budget and we tend to spend right up to that budget. With Canadian consumer debt at 170% of incomes, it looks like we have even gone a wee bit past our budgets. Once you’re seduced by the smell and gloss of a new car it’s hard to consider a pre-owned one. If you get used to heading out for lunch each day, the bother of a little Sunday night prep will seem too onerous.

Use the force of habit to build wealth

But start to develop your positive financial habits and they will create a powerful addiction. Forget budgeting. Build a simple net worth sheet and track your progress monthly until you get the hang of it, then switch to quarterly. (You can download a free net worth sheet to start from the Utensils Page.) Use it to Log what you own and what you owe and focus on the difference between the two. Is your financial value rising or falling? Are you making progress toward financial independence, or just gathering more things that depreciate?

With a focus on building net worth vs tracking to a budget, your decision-making process will change. Bringing a lunch could save $8 a day. That isn’t a lot on its own, but it adds up fast! That little daily savings tallies to $168 a month. Sounds pretty good right? Invest that in your TFSA for 10 years at 7% and you would have nearly $30,000. Peel out another $8 a day on the coffee and a saturated fat-laden, cholesterol-boosting muffin and you free up another $168 a month for a total of $60,000 extra in your TFSA. It’ll be some of the easiest money you ever make, and it’ll be healthier for you too. Such a fantastic start. Once you’ve got that down, you can find a few more do-betters and your wealth will accelerate!

Focus on net worth

Once you focus on net worth and get the ball rolling, more good financial habits will follow. There are dozens of them that are easy to implement with low sacrifice. Over time your wealth will accumulate, and you’ll free yourself up for some new options. Maybe you’ll travel the world while your money grows! Or perhaps start that small business you’ve been dreaming of since your 20’s. Or if you’re the giving type, you could make a big, lasting gift to your favourite charity.

There’s no time like the present! Let me know how you’re doing with applying the force of habits in your diet, fitness, and financial worlds in the comments section below. Don’t be afraid to ask questions!

Cashflow Cookbook is all about increasing financial literacy and building financial independence with minimal sacrifice. Share if you enjoyed this.

Why Are You Paying Double For Everything?

What if you could have 50% off everything you ever wanted?

Oh, and what if there was also no sales tax? Of course, this sale has existed forever with people selling things that they hardly used. How different is a well-maintained, year-old tennis racket from a new one? What’s likely to go wrong with a 3-year-old coffee table? Fender Guitars claims that 41% of the people buying new guitars are beginners and that 90% give up playing within a year. That’s a lot of beautiful guitars on sale at about 50% off. And with no tax. There’s just one issue: how do you find this stuff?

Yard Sales are Hit or Miss.

One approach is to hunt yard sales in the spring. The bargains are all there, often at more than 50% off. But the logistics are bad. Driving around, sifting through lots of salt and pepper shakers and ashtrays (remember those?) to find that vintage turntable you’re after. Then there’s the issue of buying extra junk that seemed like a good idea at the time. You know, the type of junk that makes it to the curb of your own yard sale a year later. Yes, the pricing is often 50% off, but good luck finding exactly what you want. And if you want something in the fall, you need to wait for the spring. Painful.

Craigslist and Kijiji Have the Goods. Somewhere.

As yard sales moved online, the driving went away and the selection blossomed. Maybe too much though. Searching for, say, exercise gear means reading dozens of online pages, combing through each one for exactly the right equipment. Getting the full picture involves clicking into each ad to get the details, the location and the item condition. Not so fun.

And then you need to actually contact the seller, hope they respond, and set up a time to actually see and test out the stuff. How is this better than a yard sale again?

Then, when you inevitably fail at finding what you’re looking for the first few times you check, you’re stuck continuously checking back for new listings. And what about trying to keep track of the listings you found earlier. Is the stuff still available? Oh, and did you already respond to that one out in the West end?

Put Your Online Shopping on Autopilot

Buried somewhere in most of these online classifieds is an Alert function. Beautiful. Do some digging. It is in there on most of the online classified tools. Once you find it, you can start a search for exactly what you need (or want). Maybe it’s a pre-1969 Dylan vinyl, or a KitchenAid blender, or a log splitter for the cottage, or a set of 205/55/17 Michelin X-Ice snow tires on VW factory rims. Or maybe you’re hunting some vintage gold jewelry for your anniversary. Whatever it is, you can set up the Alert just how you like it. It only takes about a minute. Then you can go about your business, whatever it is that you do do.

Call Me When It’s Ready

A week or a month later, up it will pop in your inbox. A little alert that someone has the thing you crave. Have a peek! Delete it if something isn’t quite right, and maybe refine the alert. But sooner or later it will arrive. Exactly what you wanted. Just like my Fender Stratocaster with the maple neck and the Sienna finish. It took about a minute to set up the alert, and just a couple of weeks for the good news to arrive. After an hour of driving and $1,000 cash, voila! I saved $1,400 on my new guitar. An amount that continues to grow in my TFSA.

Buying high quality pre-owned items is a great way to free up cash to invest and build a path to financial independence.

If you really need a new one or can’t find a used one, maybe think about shopping off-season. Learn more about that here.

Cross Border Online Shopping

So it’s a lovely day and you are huddled over your smart device doing a little online shopping. You find the perfect shirt with a great pattern and it is just your size. Or maybe it is that hard-to-find oil pump housing bracket for your boat. Perhaps it is a garden gnome that matches the shade of your bougainvilleas. Whatever the heck it is, it’s there, right on the web site at a price that looks to be unbeatable. Pleased with your find, you begin entering all of your shopper data and then you see the hint. Could be a weird area code, mention of a state or some spelling that is lacking a “u”. Oops. An American website. The pricing is in US dollars. Not quite the deal you were hoping for.