Did you know that it only takes 21 days to establish a good habit or break a bad habit? 3 weeks. You only need to do something for 21 days straight to keep doing that thing. Conversely, you only need to keep from doing something for 21 days straight to get off the habit. Powerful, no?
The good news is that this ‘rule’ can apply to many things in life not just quitting smoking or kicking a drinking habit. You can use the 21 day rule to lose weight or acquire good job habits. Most importantly, you can use it to your favor when trying to gain good financial habits.
The most fundamental good financial habit everyone needs to acquire, of course, is the habit of saving. Everyone needs to know this habit since it is the cornerstone of financial responsibility. If you spend every dollar you come across, you will not accumulate anything and you will be struggling forever. The key is to always put away a little bit of what you bring in. For many people, this is easier said than done.
Here are some of the key elements of using the 21 day rule to establish a healthy savings habit.
21 days to resisting financial temptation
For many people, savings can only happen if they are able to resist spending. They don’t even get to the stage of wilfully putting stuff away for a rainy day. The reason is that they can’t resist spending so there is nothing left to save. Even if they wanted to put a little bit away for a future rainy day, there just isn’t anything left.
If you are experiencing this challenge, you should use the 21 day ‘rule’ to help you resist financial temptation. Give yourself avery low daily budget. Your mission for 21 days is to stay within that daily budget. The focus is not so much to save what’s left over but to stay within the low daily limit.
You have to resist buying things on impulse. You have to resist buying things you don’t need. Keep this up for 21 days and you are ready to go to the next stage-21 days to saving.
21 days to saving
After you have resisted the impulse to buy, the next 21 day habit you must acquire is to save. This means that you not only have to spend less than your daily limit, you have to also put away enough of what is left over. This might seem like an easy thing to do but you do have expenses like rent, car notes, student loans, and other things you need to pay which can drain quite a bit of the stuff that is left over.
The key here is to meet your savings target first then pay expenses. This might seem counterintuitive but this is one of the most powerful money management practices you will ever learn.
Always pay your savings first. Focus on lowering your expenses so your expenses are covered by what is left after you have taken care of your savings. This is going to be rough since you are working on both savings and expenses. However, if you keep it up for 21 days, it will all be worth it.