The Power of Habit

The Power of Habit

Yes, I ripped off the title from Charles DuHigg’s great book The Power of Habit. But I think DuHigg is onto something. The core idea of the book is that forming habits can lead to success. I recently had a post exploring the issue of finding balance between blogging and real life. After reading DuHigg’s book, I believe forming habits is the key when it comes to personal finance.


Forming Fitness Habits

Back in August, I wrote about how exercise training is linked to personal finance. Specifically, I wrote about how training for a half marathon was remarkably similar to saving money. The core concept of the post was that to be successful at both required the formation of a habit. To form the habit, you need structure. You need a plan.

For my half marathon training, I had a goal. My goal was to run the half marathon in around 2 hours. In order to accomplish this goal, I looked to a formal training plan to provide me structure to my training routine. I tweaked and customized it to fit my own unique needs, but largely stayed true to the basic overarching structure of the formal training plan. I created my training plan. And the structure of this training plan helped form my training habits.

Let me show you my half marathon training visually:

Personal Finance Half Marathon


The graphs should give you a sense of the importance of consistency. The importance of habit. Having structure and a plan allowed me to form habits for my training. Specifically, it got me into the habit of running at least 3 times a week, with 1 longer run each week. And forming this habit allowed me to attain my goal of running a half marathon – in 2 hours and 4 minutes.

Forming Financial Habits

Is all this talk about training and exercise going somewhere with personal finance? Let me connect the idea of forming habits in fitness with forming habits in finance.

I had a post recently where I took the data from my student loan payments and graphed it to make it aesthetically pleasing to the eye. When my repayment period began, my goal for my student loans was to pay them off in under 3 years. I crunched some numbers and set up a plan to allocate enough money each month in order to achieve this goal. The structure of my student loan repayment plan helped form my debt repayment habits.

Let me show you my student loan repayment visually:

The Power of Habit

Again, devising and implementing a plan allowed me to form a habit. In this case monthly debt repayment habits. My plan to pay off my student loans in under 3 years helped form my habit to pay an average of $1500 every month towards my student loans. And forming this habit is going to help pay these student loans off by December 2014 – an estimated payoff in 2 years and 7 months.

Creating Habits

The power of habits has been a great way to attain some of the goals I’ve set out for in my life. The fact that I was even creating habits only clicked as I read through DuHigg’s book. Once you get going with creating habits, it actually becomes fun to keep the streak going.

Seeing as how 1) Visioning a Goal, 2) Creating a Plan, and 3) Creating Habits has been successful for me, I will try to apply this technique to other aspects of my financial and non-financial life. A key area where outside of finance I would like to develop some habits revolve around waking up early to exercise, read, and write before going to work.

It seems habits can be a persuasive way to successfully attaining your goals. Are you creating powerful habits?

4 thoughts on “The Power of Habit

  1. That is the same way I treated my provincial fitness competition, create a ganmeplan and stick to it. Things are easy when they become engrained into your everyday life. People always ask how you can accomplish such amazing things , we can tell them its super hard and a struggle to feel better LOL but honestly if you make it a habit then life can be put in cruise mode. Sorry Steve, I don’t have graph skills so no picture to share with you. Good post!
    PS. keep the weather warm out there, we move west next weekend.

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