Find out what a micro habit is and how to use them to improve your financial life. They require minimal time, effort, and motivation, but can build up to huge, significant results when you make them part of your routine.
I also recommend calculating what an item costs you in time. Here’s a shortcut to convert your annual income into an hourly rate: If you earn $50,000 a year, shorten it to $50, then take half, which equals $25 per hour. So, if a new pair of boots cost $250, earning $25 per hour means they’d cost you 10 hours of work—before taxes.
Are new boots worth the equivalent of a long workday? Only you can decide. Doing time value calculations and waiting 24 hours are micro habits that can instantly reframe how you think about making a purchase.
6. Automating your savings.
A micro habit that you can put on autopilot is automating savings and investments. The idea is that what you don’t see in your bank account, you can’t spend.
That’s why workplace retirement plans with automatic payroll deductions, such as 401ks or 403bs, work so well. So, contribute as much as you can at work, or create a recurring transfer to move money from your checking to an IRA or bank savings account, as soon as you’re paid.
It’s OK to start small. Even investing $50 a month is better than nothing. If you invested that much for 40 years and earned a conservative 6% return, you’d have $100,000.
Creating your accounts and setting the savings automation infrastructure is what’s most important to build wealth and move your finances in a positive direction.
7. Saying “no” more often.
Saying “no” to negative people or invitations that don’t align with your goals is a wise micro habit to develop. It can be much harder to do the right things when you’re around other people’s drama and conflicts.
The people you surround yourself with have a major influence over who you become. So, don’t let negative influences penetrate your mind. Stay true to who you are and what you want to accomplish.
Instead of acting unconsciously and being jerked around by unproductive impulses, use these tiny habits to ease into a new world of positive behaviors and outcomes.
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