How To Break Your Bad Habits And Get Rich

By Douglas Goldstein, CFP®

Money woes are generally not due to a market gone awry or a low salary. The number one cause of most money problems is bad financial habits.

Do you spend without tracking what is leaving your wallet, neglect to make regular deposits in savings, and overlook regular financial reviews and discussion of financial goals with your partner? If so, you may be guilty of harboring negative financial habits. Bad financial habits can be as deadly as smoking.

Some habits are so ingrained that it seems impossible to break them… but it can be done! I spoke with James Clear, an expert in habit creation, on The Goldstein on Gelt Show about how people could improve their finances by replacing negative habits with positive ones.

Why stopping cold turkey doesn’t work

Stopping a bad habit by simply not doing it anymore doesn’t tend to work since nature hates a void. Instead of just stopping your bad habit, find a good habit to substitute for the negative one. For example, instead of “retail therapy” to improve your spirits by going out shopping try exercise or chatting with a friend. Or replace your credit card in your wallet with a picture of your saving goal to provide a constant reminder of what you are working towards.

Join forces with a friend

One of the best ways to improve your financial habits is to team up with a partner. Read self-help books together, or attend an online financial education class (ask me for recommendations). When two people work together, you can both support each other through the inevitable ups-and-downs of creating a positive habit.

The key to success

When you launch a new habit, start with a positive attitude. If you believe you can succeed, you are more likely to do so than if you set yourself up for a negative outcome.

For more concrete tips on improving financial habits, listen to my discussion with James Clear at: http://www.goldsteinongelt.com/james-clear.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. His best-selling book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is available at online, at bookstores, and at www.RichAsAKing.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.