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Are you trying to create better financial habits?

Back in January, the Go From Broke Book Club read Atomic Habits by James Clear. The book explains how you can create lasting change just by starting off with tiny habits.

In today's episode I'll cover what I learned reading the book, specifically, four key steps you cna take to create better financial habits and take control of your money once and for all.

Action Task

For this week's action task choose one of these habits to focus on and see how you can incorporate it into your daily routine..

Start by gaining awareness of your current habits, track where your money's going, redesign your environment to help you succeed, or identify with the type of person you want to be.

By implementing just one of these habits, you'll be well on your way to taking control of your money and improving your financial situation.

And if you haven't read Atomic Habits, go do that too!

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Below is the transcript from today's show. Or you can download the full transcript as a PDF.

Welcome to the Go From Broke podcast where you'll learn how to take control of your money so you can stress less and save more. If you're tired of living paycheck to paycheck or constantly wondering where your money is going, you're in the right place. This podcast is all about giving you actionable tips and advice so you can get started improving your finances today.

Back in January I started the Go From Broke Book Club with the inaugural reading being James Clear's Atomic Habits.

This book is all about how you can use tiny habits to create building blocks to lasting change.

And in today's episode, I'm going to cover four steps to creating better financial habits that will have you taking control of your money once and for all.

Step one is to gain awareness into your habits.

As James says in Atomic Habits, "The first step to changing bad habits is to be on the lookout for them."

Awareness is really key when it comes to taking control of your finances.

Mindless and unintentional spending causes all sorts of problems, not the least of which may be ever-growing debt.

So start spending deliberately and in alignment with your values and you'll start seeing an improvement in your finances.

Step two to creating atomic habits for your finances is to track your spending.

Here's another quote from the book. "The mere act of tracking a behavior can spark the urge to change it."

Keep track of every penny you spend to get a clear picture of where your money's going.

As you start to see all the places you're spending, you'll also start to notice the expenses you can eliminate or reduce because they don't really align with your values.

It's all too easy to make mindless spending decisions, but by tracking your behavior you can start to change that and get control over where your money is going.

The third step to creating good financial habits is to redesign your environment to facilitate success.

In Atomic Habits, the author states, "Much of the battle of building better habits comes down to finding ways to reduce the friction associated with our good habits and increase the friction associated with our bad ones."

So, how can you apply that to your money?

Well, there are a few different ways that I can think of, but for me, the first thing I'd focus on is making it harder to spend impulsively.

I know that's an area of weakness for me, so to increase the friction around that bad habit, I can leave my credit cards at home when I go out or I can unsubscribe from all my favorite store email lists.

I could also remove the saved payment information from my computer and especially on Amazon. By forcing myself to get up and go find my wallet in order to buy something online, it might just make me rethink buying it at all.

You can also design your environment to encourage more positive financial habits like saving more money.

For example, you could put out a jar or a piggy bank on your counter to drop loose change in. Reducing the friction of saving your money makes it more likely that you'll do it.

Another great way to reduce that friction is to automate your savings.

You could create an automated withdrawal from your checking into your savings each month or every paycheck and just watch it grow without you even having to think about it.

Finally step four is to learn to identify with the type of person you want to be.

Here's one final quote from Atomic Habits that leads us into this fourth step.

"The key to building lasting habits is focusing on creating a new identity first. Your current behaviors are simply a reflection of your current identity. What you do now is a mirror image of the type of person you believe that you are either consciously or subconsciously.

To change your behavior for good you need to start believing new things about yourself. "

That was a long quote.

But the way I understand that is by assessing your existing money mindset you can adjust it to improve your finances.

For example, if you tell yourself that you're bad with money or that rich people are evil, you're creating narratives that are preventing you from growing your wealth.

You'll never get better with your money if you don't think it's possible and you certainly won't strive to increase your wealth if you think that all wealthy people are evil.

On the other hand, if you think of yourself as a smart and savvy investor and someone who's in control of their money, well, that's going to help you embody those qualities and make better decisions when it comes to your finances.

So start thinking of yourself as the type of person who has their finances in order and see how that changes your attitude towards your money and your spending habits.

All right. So there you have it, four simple steps to creating better financial habits.

Start by gaining awareness of your current habits, track where your money's going, redesign your environment to help you succeed and identify with the type of person you want to be.

If you could start implementing these habits, you'll be well on your way to taking control of your money and improving your financial situation.

All right, your action task today is to choose one of these habits to focus on and see how you can incorporate it into your daily routine.

And if you're looking for more habit hacks to help you get your finances in order, I'd highly recommend reading Atomic Habits by James Clear. It's a great read that will help you create habits that will improve every area of your life. Not just your finances.

If you enjoyed today's episode, don't forget to leave a rating and review to help other people find it and remember to subscribe so you never miss an episode as always take action and make it a great day.

Oh hey, before you go, I wanted to let you know that Go From Broke isn't just a website and podcast anymore. I now offer one-on-one financial coaching too. So if you've been stressed out and struggling to take control of your money, let's chat!

Head over to gofrombroke.com/coaching to schedule a free Q&A call where we'll discuss your unique situation and whether financial coaching is a good fit for you.

I look forward to hearing from you and can't wait to help you stress less and save more.