The secret of change is to focus all of your energy not on fighting the old, but on building the new.

– Socrates

They say that statistically, it takes three weeks for a new habit to form. I say: “rubbish”. You may fight for some time for a new activity to truly become a new habit, particularly if it is something that doesn’t come easily to you. Don’t give up if you haven’t mastered a new habit after three weeks, particularly where your finances are concerned. If you have a fail around your finances, keep getting up, brushing yourself off and starting again. If you’re financially better off today than you were yesterday, you are making progress. Everyone who is wealthy today had a starting point where they decided to build wealth. Just because you’ve taken a bit longer, it doesn’t mean you’ve failed. Keep going.

On New Year’s Eve 2015, I decided to give up sugar. I was in Rome on holiday with my sons. At first it was really tough. I craved sugar constantly. Then the cravings eased. From time to time, when I had a bad day, I would tell myself that I deserved a chocolate. That really didn’t help. It was an on-again, off-again journey. I think it took me about 12 months to really give up sugar. I’m now in a position where I don’t crave it. I don’t think about it. I can’t say I’m not tempted by it; I still fall over from time to time but I feel like I’m in a much stronger place.

In his book, The Compound Effect, Darren Hardy says if you have a large financial goal, don’t ask what you need to do; rather, ask who you need to become. Darren discusses how success and failure are not the result of big decisions. The magic lies in the little decisions we make over and over again, every day.

habits systems design wealth process The same concept is discussed by Jeff Olson in his book The Slight Edge. Jeff talks about the importance of what you do every day. He makes a really great point about the all the small decisions that you make every day adding up to big results in the long run. If you look at them as a single event – they seem insignificant. It seems like it wouldn’t matter if you did it or if you didn’t do it. He discusses how they are easy to do, but just as easy not to do, and it’s the consistency of doing them that makes the difference over time. He calls it the compound effect. The act of doing small things, things that don’t seem any difference at all, ridiculously easy things over and over again, until the compound effect kicks in.

Let’s use a morning coffee as an example. The four dollars you spend on a morning coffee seems insignificant. It seems like it wouldn’t matter to your overall finances whether you bought a coffee or didn’t buy a coffee. What difference would four dollars make to your overall finances? Let’s do the numbers. Four dollars a day is $28 a week or $1,456 a year. Imagine if that money was invested and earned, say 7% a year. Over five years, the investment (with magic of compound interest), would be worth $15,441. Imagine it was your lunch every day at work, at say $10 a day. Over five years that number would be $27, 574.13. Now imagine, if you put the coffee money and the lunch money off your mortgage.

What small thing can you change today that will improve your life long term? If you struggle with the idea of change, or the task itself feels overwhelming, tackle the smallest, easiest thing today. Success breeds success. The small wins you have today will build your confidence to take on bigger challenges tomorrow.

It’s the small things that you do every day, your habits, that make all the difference to your overall financial situation. Benjamin Franklin says that your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.

Habits can serve us or sabotage us. Becoming aware of our habits around money, and creating habits to build and sustain you is a big part of success.