Tiny habits can and will change the course of your life, whether for better or worse. You may not even realize their effect until years later!
This is known as the “butterfly effect.”
Coined in the 1960s by Edward Lorenz, a meteorology professor at the Massachusetts Institute of Technology, who was studying weather patterns, theorized that the single flap of a butterfly’s wings causes air molecules to shift, thus causing a hurricane somewhere much, much further away. In layman’s terms, this means small actions can have bigger effects than you realize.
Small actions, like impulse spending over time, can have bigger effects than you realize, like keeping you in debt.
Your mindset and habits today can make you lose or keep your money.
I’m not the exception to this — I’ve put myself in over $15k of credit card debt.
I’ve realized that when it comes to financial mistakes:
- No one is going to save you.
- Your future will eventually become your present.
- Not everything can be achieved for free.
“Encouragement is temporary, proof lasts a lifetime.” — Andy Andrews
So I’m not here to encourage you out of your debt-free journey. I’m here to prove, beyond reasonable doubt, that your mindset shift will defeat your debt.
Here are 3 habits I adopted to change my financial life:
- Forgive yourself for your past financial mistakes.
The path to the growth mindset starts with self-forgiveness. This is crucial because the scarcity mindset tells you, you’ll never change or get out of debt.
“When believing that change is not only possible but also easy, negative past behavior may no longer serve as a guide or a cautionary tale for future behavior.” — Johanna Peetz, Ph.D
Belief is less about motivation and more about discipline. It is the shift in the molecules, the proof, not the encouragement. Belief is self-efficacy.
How you talk to yourself and those around you about money matters. This is how you save yourself.
- Always have an abundance mindset about money.
Is this a contradiction to spend money because *mindset?* Think carefully. Your overspending is a cautionary tale telling you to seek constant dopamine hits.
I’d like to redefine an “abundance mindset” as an abundance of learning, not spending.
- Learning about investing even while paying off debt.
- Increasing your savings rate with a HYSA or CD instead of a low-rate bank account
- Utilizing tax-advantaged accounts (maxing 401k, HSA)
- Eating and exercising for continued health (it’s less costly overall)
James Clear states that “habits are attractive when we associate them with positive feelings and unattractive when we associate them with negative feelings.”
A budget, quite commonly, can help course-correct overspending money. But abundant learning now drives Future You.
- Give every dollar a job toward your financial life.
This is not to assign a budgeting tool to you — you know the guy to go to. Instead, I turn to Dominique Broadway’s philosophy of “Be the CEO of your money.” I’ll paraphrase the qualities of this CEO from her book:
- You’re in charge of everything.
- You have a clear vision of what’s next.
- You have people around you for support.
- You maintain control of your emotions.
Now, your dollars work for you. I’d like to say it like you had to hire your dollars, and therefore you incurred the payroll expense to do so (getting paid from the 9–5 [or another income source] to then fund your 401k, pay creditors for your debt, buy dinner, invest in courses, etc.).
Your life is designed around your habits, those who you spend time with, and how you view yourself.
I may not have wealthy friends, but I have open- and wealthy-minded friends. Work together and pool your resources.
Conclusion
Every outcome of your life is caused by one action at a time. The results that follow are up to you.
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Please note that this publication is for informational purposes only and I am not a financial professional. Though I am a Certified Financial Education Instructor™, this shouldn’t be considered as certified financial or legal advice. Please seek professional guidance for those decisions.