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James Clear, author of Atomic Habits, has an incredible ability to communicate powerfully in very few words. The first quote I saw of his in 2018 said “the definition of greatness is to contribute more than you consume.” This idea resonated with me and spurred me to dig deeper into his work. Sometimes, no matter how obvious, we just need to be reminded in a fresh and new way of the true things we already know. That is what the below tweet and James Clear’s book Atomic Habits have done for me.
I just finished reading Atomic Habits for the second time. I am still digesting because there is so much to take away. Atomic Habits lays out four laws of habit building, and when employed in the inverse, habit breaking.
The 1st Law – Make It Obvious
Making it obvious is about the cue or the trigger. You are walking through the kitchen looking for your car keys and see cookies on the counter. You were not hungry but the cookies being on the counter will trigger grabbing one. Clear explains how we can set intentional triggers for the habits we want to establish and how important our environment is.
My wife and I wanted to exude more gratitude so we established “gratitude before grub” and it has become an evening tradition now, a habit you might say. It started with writing “gratitude before grub” on a notecard and taping it to the kitchen table where we set both of our plates. Seeing this every night before we eat triggers the habit of stating one thing we are grateful for before we eat. After a few nights, it did not matter if we were at a friend’s house for dinner or eating on the back patio, we were expressing gratitude before we ate.
“You do not rise to the level of your goals. You fall to the level of your systems.” – James Clear
The 2nd Law – Make it Attractive
For our human nature to adopt and stick with a habit it must be attractive to us. Framing our identity plays a big role in making the habit attractive. Instead of forcing yourself to go to the gym in an attempt at better health, reframe the habit from a necessary evil to something that aligns with who you are. If you see yourself as someone who cares about physical wellbeing and as someone who does not miss a workout you have made the habit much more attractive as it now aligns with your view of yourself. If you see yourself as someone who dislikes physical exercise and only forces yourself to go to the gym in hopes of attaining a healthier body, you are fighting an uphill battle and your only weapon is sheer motivation.
Clear shares a story in the book of a man in a wheelchair who was once asked if it was difficult for him to be confined all day and he responded “I’m not confined to my wheelchair – I am liberated by it. If it wasn’t for my wheelchair, I would be bed-bound and never able to leave my house.” This is a powerful example of re-framing identity.
“Your identity emerges out of your habits. Every action is a vote for the type of person you wish to become.” – James Clear
The 3rd Law – Make It Easy
Make your desired behavior as effortless as possible. A great example out of the book is if you wish to watch less TV, when you finish watching the TV unplug it from the wall. The next time you sit on the couch to turn it on you will have to get up, go over to the wall, and plug it in. This little extra effort could very well be enough to accomplish your goal of less TV consumption.
“Human behavior follows the Law of Least Effort. We will naturally gravitate toward the option that requires the least amount of work.” – James Clear
The 4th Law – Make It Satisfying
The human brain is designed to prefer immediate rewards over future rewards. This concept is called “time inconsistency” where we place much less importance on the future than we do the present. This is what can make building habits with long-term payoffs so difficult, there is no immediate feedback. Clear suggests that tracking can provide the immediate gratification needed to keep the habit. Everyone loves to check something off the to-do list or mark an X through the calendar upon successful completion of a task so use that to your advantage. Set targets for yourself and track your progress to make the process more satisfying.
“One of the most satisfying feelings is the feeling of making progress.” – James Clear
I have seen the power of these simple concepts in personal finance habits as well. I recently opened four different money market savings accounts and gave them different names. This makes it obvious what each bucket of money is for and lowers the temptation of using those funds for something else.
Years ago, I built a large Excel spreadsheet to track my spending and my budget. The spreadsheet was cumbersome and time consuming to update. It got to the point where I was not tracking our spending at all. That all changed when I purchased You Need a Budget which is an online budgeting tool that links to your bank account and automatically downloads your activity. This reduced friction has made it easy to stick with the habit of monitoring the household budget.
“The first rule of compounding: Never interrupt it unnecessarily.” – Charlie Munger
What About You?
What habits are you looking to implement? What ways do you want to improve your personal finances? Can those improvements be turned into good financial long-term habits? Many good personal finance decisions are difficult to establish and stick with. These decisions are often a direct trade-off between current satisfaction for future satisfaction, which is not fun. Using James Clear’s four laws can be helpful in framing those desired habits into something you can commit to by making them obvious, attractive, easy, and satisfying.