Productivity

How Pre-Commitment Mechanisms Can Help You Resist Impulse Buys

Emily Guy Birken — Mon, 28 Oct 2019 08:00:07 +0000

If you've read the Greek epic The Odyssey, you may remember Odysseus's ingenious plan to hear the dangerous voices of the sirens, who would lure sailors to their deaths. Every member of his crew plugs their ears with beeswax so they can't hear the tempting song, and Odysseus latches himself tightly to the mast of his ship, so that he cannot escape and steer the ship off course. With a little forethought, Odysseus manages to be the only human who hears the sirens' song and lives to tell the tale.

Odysseus's scheme is an excellent example of what behavioral economists and social scientists call "pre-commitment mechanisms." These mechanisms can be powerful tools in helping people overcome impulsive behavior, and specifically, overspending.

Here's what you need to know about pre-commitment mechanisms and how you can incorporate them into your financial decisions. (See also: 5 Mental Biases That Are Keeping You Poor)

Why do pre-commitments work?

According to Dr. Daniel Crosby, author of The Behavioral Investor, "pre-commitment works because it takes natural (and sometimes negative) human tendencies like laziness and status quo bias and actually makes them work for us."

Since we're likely to let a previous decision stand if it keeps us from having to make a new decision, we can profit from our own laziness. For instance, someone trying to maintain a healthy lifestyle may not keep donuts or ice cream in their home as a pre-commitment to eating better. Since getting junk food requires leaving the house, the pre-commitment of not buying treats can often be enough to keep sweets out of their diet.

Pre-commitments can help align your long-term goals with your short-term decisions. Dr. Crosby writes that "a pre-commitment should be used anytime we feel our short-term preferences may change, but our hope is for our long-term commitments to mirror our current frame of mind."

This means that anyone who'd like to spend less, make rational investment choices, or pay down debt could benefit from creating pre-commitment mechanisms.

What does a pre-commitment mechanism look like?

There are multiple ways to create a pre-commitment mechanism to keep you on track to accomplishing your goals.

Social consequences

Many successful budgeters blog about their journey out of debt or toward financial independence. These budgeters are pre-committing to social consequences if they should fall off the debt-repayment wagon. The negative social consequences of reneging on the publicly stated goals are much stronger than the immediate temptation to spend, which helps those who share their goals publicly to stay on track.

In the modern world, there are a number of ways to use social consequences as a pre-commitment to improving your spending habits. For instance, you can set up an automated alert from your bank or credit card issuer that texts your spouse anytime you make a transaction larger than a certain amount. The social consequences of having to explain your purchase to your spouse can be enough to make you pause before buying anything.

In addition, you can also seek out accountability partners via social networks or take a page from debt bloggers and record your journey in a blog.

Automation

Having your savings taken automatically from your checking account allows you to pre-commit to a savings strategy that's harder to undo. This automated decision allows you to benefit from your own disinclination to change the default setting. (See also: 5 Ways to Automate Your Finances)

According to Dr. Crosby, one of the most famous examples of a pre-commitment mechanism is the Save More Tomorrow program, popularized by Richard Thaler and Shlomo Benartzi:

"It involves pre-commiting to the auto-withdrawal and auto-escalation of retirement savings over time. Effectively, it allows a retirement saver to make a good decision once that benefits them for the entirety of their savings lifetime. People are busy, their willpower is weak, and their decisions can be inconsistent. By 'setting and forgetting' decisions like saving and escalating retirement contributions, human frailty gets turned on its head."

Remove temptations

Another pre-commitment option is to change your environment so that you encounter fewer temptations. This is what the dieter who has no sweet treats at home is doing. Reformed spenders can do the same by taking their credit card out of their wallet. (There's a very good reason for the old-fashioned advice about freezing your credit card in a block of ice.)

Similarly, removing your payment information from your favorite online retail sites, unsubscribing from retail email newsletters, and immediately recycling paper catalogs you receive can all help you avoid the siren song of spending.

When pre-commitments don't work

While setting up pre-commitment mechanisms can do a great deal to help you improve your financial life, they're not magic. A pre-commitment that can be undone will be undone if it's easy for you to change your commitment when you're feeling tempted.

Dr. Crosby has seen that creating rules-based pre-commitment strategies often does little to stop investors from reacting emotionally. "Jim O'Shaughnessy, the godfather of quantitative investing, recently revealed that 60 percent of rules-based traders broke their rules during the Great Recession, effectively nullifying their pre-commitment (which is all an automated, quantitative strategy really is)."

These traders had pre-committed to a kind of "if this, then that" rules system for investing. But when they got scared about their investments, they ignored the rules they had committed to. Because they could break their own rules, these traders did so, despite their pre-commitment to more rational investment choices.

This is why Dr. Crosby recommends making your pre-commitments difficult to alter. "Once you've made a commitment, you want it to be as hard as possible to change it. Make that choice and lose the key!"

Know your temptations

Pre-commitments can help you protect yourself from making easy, habitual, lazy, emotional, or poorly-thought-out decisions. But your pre-commitments will be more effective if you know which temptations are most likely to affect you, and if you make your pre-commitments difficult to change.

Be like Odysseus, and outsmart your worst impulses before you have a chance to indulge them.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Keep Office Solicitations From Busting Your Budget

Emily Guy Birken — Thu, 29 Aug 2019 08:00:06 +0000

Are office solicitations becoming a regular drain on your paycheck?

Last week, it was the IT woman asking if you'd buy overpriced gift wrap to support her daughter's music program. Earlier this week, the head administrative assistant asked everyone to chip in $20 for an upcoming retirement party. And you know that Ted from accounting is going to hit you up for a donation toward that charitable 10K he's been training for.

While you're happy to support all of these coworkers and their causes individually, together it's getting to be a major financial burden.

So how do you keep these regular solicitations from wrecking your carefully planned budget? Here's what you need to know about navigating this financial and etiquette minefield. (See also: 8 Awkward Money Moments Everyone Has at Work)

Perfect your "No, thanks!"

Office solicitations are awkward because it can feel like there will be some sort of work or social repercussions for saying no to a request for money. But you have every right to refuse to give, no matter who is asking. You don't need to give a reason or an excuse. You simply need to say no.

Perfecting your polite "No" will go a long way to making sure these requests leave no hard feelings on either side. Here are some ways to refuse graciously:

"No, thank you." It's an old standby for a reason. If your coworker presses, you can say that you appreciate their passion for the cause, but you're not interested.
"I've already allocated all of my charitable spending for the year." This is polite, to the point, and not something anyone can argue with.

"I don't donate to organizations unless I have done my own research on them." This makes it clear to the office solicitor that you ultimately get to decide where your money goes.

Know your workplace policy

Many companies are well aware of how uncomfortable workplace solicitations can be, since you're a captive audience for the solicitor-du-jour, and you have to maintain a pleasant working environment with them, to boot. That's why it's common for workplaces to have solicitation policies. These policies will often prohibit one-on-one solicitations between employees, but allow more general solicitations.

For instance, your workplace may not allow the father of a girl scout to go desk-to-desk asking each of his coworkers how many boxes of Thin Mints he can put them down for, but will allow him to put a sign-up sheet in the break room for those interested.

If you're feeling pressured to give, start by finding out the specific policy in place. If multiple coworkers are not adhering to the policy, then you can say something to HR or your manager about making sure everyone knows the policy.

But what if there is no policy in place?

"Tell someone!" recommends HR professional Jenni Stone. "Solicitation only becomes a problem when it becomes disruptive. This repeated solicitation and pressure is unacceptable. Let management know what's going on so it can be addressed through creating and enforcing a policy." (See also: 10 Ways to Improve Your Company's Culture, Even If You Aren't the Boss)

Develop a personal policy

Even if there's no policy in place at work, you can still create a policy for yourself regarding donations. Having such a policy for yourself can help you say no comfortably without feeling cornered, since you've already made the decision before the sign-up sheet has gone around.

Here are a couple of ways to shape your policy:

Never give at work

If you have a flat refusal in place because you don't give money at work, then Rhonda in marketing won't be wondering why you gave to Keisha's fundraiser but not hers. If this is your policy, you could say you've budgeted for charitable donations and take care of it entirely outside of work. (See also: 10 Money Moments That Are Awkward for Everyone)

Only give in specific categories

Decide ahead of time that you will only donate to certain categories of charities. For instance, you might decide you'll only support children, education, and the arts. That makes it easier to say no if a coworker is raising money for their church or for medical research. Those are worthy causes, but they're not in the categories you've chosen to support.

Make a charitable budget

Determine the amount of money you're willing to spend on office solicitations. That could be an overall budget — like $150 for the year — or an amount like $5 per solicitation. If you choose an overall budget, you can tell anyone asking after you've used up the $150 you'd allotted that you've reached the end of your budget and to try you again next year. If you choose the $5 per request, that will allow you to support everyone without destroying your overall budget.

Pressure from management

There's an added layer of stress when the solicitation comes from above. For instance, I used to work with kids for a nonprofit charitable organization. I earned less than $10 an hour in my role as an art teacher with the organization. However, the charitable non-profit wanted to show potential donors how much the employees believed in the mission. We were all "encouraged" to give money during the annual fundraising campaign so they could say that they had 100 percent employee participation.

A similar pressure can occur when your workplace encourages you to give money toward a retirement party, wedding or baby gifts for coworkers, or to help a sick employee. You can often feel like you have no choice but to give money toward these causes, even if you're feeling financially strapped.

There are a couple of ways to handle these kinds of uncomfortable solicitations. The first is to only give what you can. When I was struggling to make ends meet working for the non-profit organization, I gave $2 toward the annual campaign one year. The higher ups made it clear they didn't care how much you gave, since getting 100 percent participation was their main goal.

In addition, remember that you can always ask if there are other ways to be supportive. Some employers will allow you to donate sick time or vacation time to coworkers. Donating a day or two of the leave you've built up could be a great way to give to an ailing coworker or a new parent without spending money.

Similarly, you could offer to set up the retirement party, bake the cake, or even run the errands necessary for the party in your off time. That shows you care without hurting your bottom line.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Use Budgeting Skills to Improve Your Time Management

Emily Guy Birken — Tue, 27 Aug 2019 08:00:06 +0000

Back when I was in college, a friend consistently asked for extensions on her essays. One evening, she mentioned the overwhelming relief she felt when she asked for a 24-hour extension, only to feel the exact same deadline anxiety and stress the following day as her new deadline approached.

While I had trouble relating at the time — I was a stickler for deadlines as a student — becoming a freelance writer has made me understand the alternating waves of dread/relief/dread that occurs when you put off a deadline.

What's interesting about this kind of poor time management cycle is that it's similar to the cycle of debt that occurs when you struggle with money management. In both cases, you're putting off thinking about future demands on your time or money because you're focused on the issues right in front of you. You put off your deadline, or borrow money to pay your rent, forgetting that there's another deadline or bill coming right behind the one you temporarily stalled.

The good news is that if you're actively tracking your spending and sticking to your budget, then you've already mastered time management skills — you just think of them as money management skills. But applying the following budgeting skills to time management will help you feel well-planned and stress free. (See also: 10 Time-Management Fails — and How to Fix Them)

Pay yourself first

We all know that planning to save whatever money is left at the end of the month is a good way to never save anything at all. That's why paying yourself first is one of the most important rules of good budgeting. Making sure that your financial plans are funded — before you let today's wants drain your savings — allows you to be a step ahead of future problems.

If you struggle with time management, you can also get ahead of future problems by paying yourself first. The trick is to take about 15 minutes each morning to review your calendar and make plans before you jump into your work for the day.

You might feel like you don't have enough time to take 15 minutes each morning for planning. After all, Sheryl in accounting needs that report ASAP and you still haven't prepared for the meeting with the boss.

But skipping your 15 minutes of planning is like forgoing your savings at the beginning of the month. It leaves you unprepared for things that you could've easily seen coming. Just like a transfer to savings at the beginning of every month means you won't be surprised by an emergency bill (or retirement, for that matter), committing to 15 minutes of planning each morning means you won't be caught blindsided by plans, meetings, deadlines, or other scheduling needs that you might otherwise overlook.

Automate

It's a lot easier to save money or pay bills if you don't have to think about it. Setting up an automatic withdrawal from your account every payday means you never have to think about transferring money to your emergency fund or 401(k), and automatic bill pay ensures you never miss a payment. You can simply let the automation do its magic without having to remember a thing.

Your time management will work better if it's similarly effortless.

Start by finding any recurring tasks you perform, and set up a way to make them occur automatically. For instance, if you receive a number of emails that require similar responses, creating email templates can help you automate your emails. Instead of crafting a new response each time, you can simply use your templates.

In addition, automatic reminders via your calendar app can help you to get your recurring tasks done. If you're consistently late turning in your receipts for reimbursement, an automatic reminder can help you remember the due date, give you a nudge a week before to start gathering your receipts, and remind you two days prior to organize your receipts before turning them in. (See also: How to Manage Your Money When You're Too Busy to Think About It)

Track your spending

It's difficult to know where your spending leaks are if you don't know where your money goes. This is why tracking your spending is such an important part of budgeting. You need to understand where you're being wasteful to know what expenses you can cut.

Time management requires the same understanding of how you spend. How many of us feel like we're terribly time crunched, only to realize we spend hours on social media. Until you know where you spend your time, you'll struggle to find more time to do the things most important to you.

Tracking your time can seem overwhelming, but it can help you pinpoint where your days are going. There are several apps that can help you track how and where you spend your time, including Toggl and RescueTime.

However, keeping an old school time tracker (i.e., on paper) may be even more helpful. As with financial tracking, remembering that you'll have to write down a wasteful decision (whether that's buying something you don't need or watching a YouTube video while you're supposed to be studying) can give you second thoughts about your choice.

Whether you use technology or paper to track your time, having a snapshot of how you use that time can help you avoid the big time-wasters. Spending hours going down a Twitter rabbit-hole does not help you reach your goals, and tracking helps you realize just how much of a time-suck it is to just "quickly check" your feed. (See also: 5-Minute Finance: Track Your Spending)

Your productivity budget

Just like handling your budget, staying on top of your time management is hard, but not impossible. Using the skills you've practiced on your finances can help you feel more in control of your time. And that feeling of control will always feel better than any extension on a deadline.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Ask the Readers: What Helps You Be More Productive?

Ashley Jacobs — Tue, 23 Jul 2019 16:57:34 +0000

No one is 100% productive, all the time. Sometimes, we need to create the environment that allows us to work more and work better.

What helps you be more productive? Do you work better at certain times during the day? Do you tend to be more productive (or more motivated) when you're working on certain things?

Tell us what helps you be more productive and we'll enter you in a drawing to win a $20 Amazon Gift Card!

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Tell us what helps you be more productive and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why Behavior Nudges Don't Always Lead to Healthy Habits

Emily Guy Birken — Mon, 08 Jul 2019 08:00:06 +0000

In the 10 years since the illuminating book Nudge: Improving Decisions About Health, Wealth, and Happiness by Nobel Prize-winning economist Richard Thaler and legal scholar Cass Sunstein was published, the idea of nudging people to make better decisions has become mainstream in everything from government to public health to personal habits.

A nudge is a way of subtly influencing choices without actually forbidding anything. One of the examples Thaler and Sunstein include in their book is the cafeteria that nudged diners into healthy eating habits by placing fruits and other healthy snacks at eye level, while putting chips and ice cream in harder-to-reach spots. No one was prevented from seeking out their favorite junk food, but the set up of the offerings encouraged diners to choose apple slices instead.

A similar successful nudge was the introduction of automatic 401(k) enrollment. When employees had to opt-in to their 401(k) program, participation was abysmal, since signing up for a retirement account is the kind of important-but-not-urgent task that many people procrastinate on. By making enrollment automatic, employees could productively ignore their 401(k), rather than ignore it at their peril. (See also: 401(k) or IRA? You Need Both)

But even though nudges have proven successful in several arenas, they're not perfect. In fact, nudges don't always work and can sometimes even backfire. Here's why nudges aren't always the best way to go about changing your habits.

Strong preferences

I'm an avid reader and a big supporter of public libraries. I'm at the library as often as twice a week. Despite this, I carry an average overdue fine balance of close to $10 at any one time, and I once wracked up an impressive $75 fine on a stack of books that remained in my library bag for weeks.

Over the years, I've tried various nudges to improve my on-time return rate. I've left books on the table by the door, set a Google calendar reminder, written my due dates on my paper calendar, left books in my car, and I've even placed "return library books" on my work to-do list. Not a single one of these nudges has worked.

What's going on here is that my preexisting preferences are far stronger than my nudges to return the books. I prefer to leave the house with just enough time to get where I'm going without an extra stop at the library and I prefer to keep working throughout the day without an interruption to return books. Those preferences will guide me no matter how insistent my nudge is, because a nudge does not take away my choices.

Strong preferences can also help to explain the phenomenon of non-compliant patients. No matter what nudges the medical profession has attempted to implement to improve patient compliance, many patients have such a strong preexisting preference to maintain their old eating and exercise habits that they'll simply ignore their doctor's recommendations. Even when it comes to taking medication, the preference to not take it is greater than even some financial nudges that pay patients to comply.

Though nudges can help to improve habits, they will not overcome strong preferences. (See also: How to Use Financial Anchors to Make Better Money Decisions)

Incomplete nudges

Sometimes nudges work, but only a little bit. That's because a nudge is encouraging a specific small behavior, when the overall outcome that you're trying to achieve is complex.

For instance, a grocery store increased its produce sales by 9 percent after installing green arrows pointing toward the produce section with a sign that said, "Follow the green arrow for your health." While it's certainly beneficial for shoppers to buy more produce, that's not the end of the beneficial habit. How many of those grocery shoppers let their purchased produce rot in their refrigerators? Particularly if their preexisting preference is for junk food?

Similarly, the cafeteria nudge that gets diners to choose apples instead of chips at lunchtime may be an incomplete nudge if the diner simply chooses unhealthy snacks for the rest of the day. The nudge within the cafeteria's confines may have worked, but it was incomplete in terms of helping to change the diner's overall eating habits.

Reactive behavior

The basis of the theory of nudging is that people aren't making the best decisions for themselves. This may be because people are distracted, overwhelmed, or suffering from cognitive biases. But if you're aware that someone is nudging you, it can be easy to feel as though the nudger doesn't think much of your intelligence.

When that happens, the fact that you're being nudged can cause you to choose another option out of stubbornness. Parents of small children are certainly familiar with this. If I give my son the choice of jeans or khakis, in an attempt to nudge him to choose long pants on a chilly day, he might refuse both and insist on wearing shorts just because I tried to influence his decision.

This refusal to comply with a nudge may explain what happened after New York City required restaurants to list the calorie content of all menu items. Instead of nudging consumers to choose lower-calorie items, this change prompted average restaurant-goers to buy slightly more calories. The nudge did not have its desired effect, in part because some diners probably felt resentful about the attempt to change their choices. This may have prompted them to either disregard the calorie counts, or gleefully indulge in the highest-calorie item they could find.

Over-saturation

I have an alarm that goes off every day at 7:30 a.m. to remind me to take my medication. My FitBit buzzes at 10 minutes to the hour if I haven't taken at least 250 steps that hour. My phone informs me at 9 p.m. every night that it's time for me to start getting ready for bed.

I ignore every single one of these nudges more often than I heed them.

Not only have I gotten used to these alarms, buzzers, and bells going off throughout my day, making them very easy to ignore, but I also know that there will be no immediate consequences if I don't take my medication, continue sitting for hours at a time, or stay up too late.

These nudges were more effective when I first set them — although my strong preexisting preferences made it difficult to comply even then. But now that my day is over-saturated in nudges that I've learned to ignore, the reminders are nothing more than momentary annoyances that I quickly turn off.

With the onslaught of nudges from our smartphones, wearable devices, and home assistants, all of these reminders can become nothing more than background noise.

Nudges are the start, not the end

Nudge theory has done a great deal to change the landscape of modern decision-making. But while nudges can help to steer decisions, they're still only gentle suggestions.

Even if you set up your environment to encourage better choices, you need to remember that habit-change requires commitment, not just nudges.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Too Many Small Decisions Can Cost You Big

Emily Guy Birken — Fri, 28 Jun 2019 08:00:06 +0000

Toward the end of her life, my grandmother's doctor told her to avoid a number of her favorite foods — including ice cream. Whenever my mother found a pint of Ben & Jerry's in my grandmother's ice box, Grandma's excuse was always the same, "Oh, the little bit I have won't hurt me!"

The thing about Grandma's excuse (that often made the vein in my mother's forehead start to pulse) was that she would have been right about one hot fudge sundae. A single decision to disregard her doctor's orders would not have made a difference in her health. The problem is that small decisions have a way of compounding, and my grandmother made her health issues worse one ice cream cone at a time.

The buildup of small decisions can be costly, whether you're trying to improve your health or your finances. Here's how small decisions can create big problems.

The tyranny of small decisions

In a 1966 essay titled The Tyranny of Small Decisions, economist Alfred Kahn describes how a well-meaning individual making a series of small decisions can end up with an unintended and unwanted large decision.

Kahn used the example of the Ithaca railroad to explain how small decisions can have devastating consequences. Rail was the only consistent mode of travel in and out of Ithaca, New York, as it could operate in any weather. But cars, buses, and planes offered faster and more convenient service in good weather. Travelers in and out of Ithaca consistently made the small, individual decision to take the most convenient service when the weather was fine. Because of these small decisions, the rail service was eventually discontinued because there were not enough travelers to cover the costs — which effectively made Ithaca unreachable in bad weather.

Every traveler who made the small decision to take a bus or plane did not intend for the rail service to dry up, but the cumulative effect of those small decisions created an enormous, negative and unintended consequence. (See also: 6 Guilty Pleasures That Are Killing Your Budget)

The latte factor

Though it has become something of a cliche, the latte factor is a common example of how the tyranny of small decisions can impact your budget. Popularized by financial expert and author David Bach, the latte factor describes how making regular small purchases, such as a daily $4 latte, can add up to a big payout that you don't intend to make. Make an unnecessary $4 purchase every day, and you spend over $1,400 per year.

This is what's so insidious about the tyranny of small decisions. Anyone who spends $1,400 on a single large purchase would at least have something of worth to show for the hole in their budget. But spending money a little at a time on small indulgences means you can't even point to where your money has gone. (See also: Here's How Rich You'd Be if You Stopped Drinking Expensive Coffee)

Easy payments and small decisions

Another important factor in how the tyranny of small decisions can destroy a budget is the fact that we now live in a largely cashless society. When you're making small purchase decisions using cash, the amount of money you have in your wallet is a natural reminder of how much you have spent.

However, it can be very easy to lose track of how much you've spent when you're using plastic to pay for everything. Each individual spending decision you make is a little thing that won't hurt your finances. But in aggregate, the decisions add up to a total dollar amount that you didn't intend to spend.

Aligning your choices with your values

Travelers to Ithaca didn't realize that prioritizing convenience on any one trip would mean the end of the rail travel they valued. Similarly, someone who isn't paying close attention to how much they're spending won't realize that their choices are adding up to something they do not want.

To combat this, it's important to align your choices with your values as often as you can.

For instance, let's say one of your values is to support local businesses. Any single trip you take to the big box store or any single item you order from Amazon will not affect the local businesses. However, if you find yourself stopping at Wal-Mart or ordering online all the time, then you're prioritizing convenience over supporting local businesses.

There's nothing wrong with valuing convenience, but you need to remember that you probably can't have both convenience and a thriving local business district at the same time. So you'll need to make sure you make choices that show your support for local business at least some of the time. (See also: 4 Ways Your Money Can Support Your Values)

Forced value alignment

Of course, it's difficult to align all your small choices with your values because each small decision feels like it's consequence-free. With no looming negative consequence on the horizon, it can feel a little ridiculous to ask yourself if buying this particular cup of coffee and a muffin will help you reach your overall financial goals. One good way to enforce value alignment is to take away your ability to make these small choices.

For instance, the standard advice about carrying cash instead of credit cards is part of the personal finance greatest hits list for a reason. When you use cash, you're forced to consider your values when making small decisions, since the resource dwindles before your eyes.

This kind of forced alignment can help defeat the tyranny of any number of small decisions. Here are a few examples:

Consumers who wish to support small local businesses could enforce that value alignment by signing up for social media updates to make sure those businesses stay on their radar.
Travelers who value an underused service could commit to taking that service rather than focusing solely on convenience.
Folks who would like to eat healthier or lose weight could make sure the tub of butter pecan ice cream never makes it to their kitchen.

Don't let small decisions pile up

It may be true that the little choices you make won't hurt you, but it can be easy to lose track of how small choices add up quickly. Rather than making each small decision out of context, take the time to figure out what you value and how your small choices will fit into those values. That way, you can be a master of your small decisions, rather than ruled by their tyranny.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Habit Boredom Makes You Abandon Your Goals

Emily Guy Birken — Mon, 20 May 2019 08:00:11 +0000

Earlier this year, fueled by a trip down the rabbit hole that is Pinterest's bullet journaling suggestions, I found a new way to make a habit of cleaning my house: habit tracking.

I set up my new habit tracker like a game board, with each of my daily housekeeping chores shaped like a different Tetris piece. Each night, I drew and colored in each piece corresponding to all of the cleaning tasks I'd taken care of that day. After coloring in my board every night for five weeks, I was absolutely certain that this time I would finally achieve my goal of having an effortlessly and continuously clean house.

I was doing everything right according to habit research. I'd created a game to give myself extrinsic motivation until the new habit took over. Repeating that habit every night for weeks meant I was well on my way to my goal.

Unfortunately, I'm currently sitting in a house that's a mess, and I haven't updated my board since March.

It turns out that reaching a goal can be incredibly difficult even if you set yourself up for success by creating a new habit. That's because of something called "habit boredom," which is the weakening of your positive emotional response to an action once it becomes habitual.

Here's what you need to know about how habit boredom can create setbacks with your goals, just when you think you're finally on your way to reaching them.

Understanding habit boredom

Establishing good habits has long been touted as a way to reach your goals. After all, researchers have found that about 40 percent of your daily activities are performed habitually. Creating beneficial habits — like putting things away, making a bag lunch to take to work each day, and drinking a glass of water before each meal — can ensure that your actions are working toward your goals of a cleaner house, better finances, and improved health.

The problem is that intentionally creating a new and beneficial habit means you have an emotional response to it. For instance, you may feel proud of yourself when you begin your habit of packing a lunch each day. Look at you, starting a new money-saving habit! You can puff out your chest with pride as you calculate how much you're saving with each homemade sandwich.

But that emotional response is not going to be quite as strong on day 17. That's because the process of creating a habit also numbs your emotional response to that habit. In other words, as the habit takes over, you're more likely to feel bored by it, since it's no longer novel.

By that point, throwing together some turkey and cheese on wheat is no longer something to be proud of — it's just Tuesday. And when your coworkers ask if you want to check out the new taco truck, the fact that you no longer have a strong emotional connection to your lunch-making habit means it'll be easy to let your poor sandwich get soggy in the refrigerator while you enjoy some tacos.

Combatting habit boredom

Part of the problem with habit boredom is the fact that you may not realize that's why you're abandoning your newly-formed habit. It may seem rational to just skip your new routine one time because you're tired, hungry, busy, or otherwise unable to let the habitual action take over.

However, habit boredom means you're resistant to making your usual brown bag lunch the next day, too. And the one after that.

There are a couple of ways to keep habit boredom from wrecking all your progress, however.

Fall in love with the boredom

Habit and productivity expert James Clear writes in his book Atomic Habits that truly elite goal-setters find a way to enjoy the boredom of their habits. If the only path to become an Olympic athlete is to spend each day doing boring, repetitive athletic exercises, then those individuals who are capable of finding ways to enjoy the boredom have a leg up over those who feel like doing yet another set is about as interesting as watching paint dry.

So how do you go about falling in love with boredom?

Pair your boring habit with something novel. Adding a fun motivator to your new habit can help you keep going with a habit that has lost its sheen. For instance, if you're trying to keep your brown bag lunch habit going, you could use fun and colorful food storage, start cutting your sandwiches into shapes, or even experiment with recipes and snacks you've always wanted to try.
Partner with a friend. You probably already know that exercise is more fun with a buddy. So is any other boring, repetitive habit. If you're trying to establish a money-saving habit, partner up with a friend who is also trying to start a new habit. Holding each other accountable can help you both stay on track when habit boredom strikes.

Embrace the process orientation

We generally establish new habits because we have a goal in mind. The problem is that habit boredom can make us feel like we've failed if the boredom strikes before we've reached the goal.

When you're focused solely on a goal, whether that goal is a cleaner house, better finances, or improved health, you often focus on the question, "Can I do this?" rather than "How do I do this?" The first question assumes that failure is an option. The second assumes that you will succeed and prompts you to figure out your process for doing so.

That's why the process orientation, which focuses on how to do something, is more likely to lead to success. The guiding principle of process orientation is the mantra "there are no failures, only ineffective solutions."

If your habit boredom leads you to abandoning your new habit, there's no need to feel like you're never going to reach your goal. You just need to tweak your solution to see if it'll better help you reach it. When you're open to asking yourself why something didn't work, you're more likely to find a solution that will work rather than simply abandon the habit and goal altogether. (See also: Habits Aren't Boring — They're the Secret to Happiness. Here's Why.)

The double-edged sword of habits

Becoming a creature of habit can do a great deal to help you reach your goals if you're intentional about your habits. But human beings are not machines that can be programmed and left to run.

We need to consistently tweak our habits, indulge our need for motivation and novelty, and recognize that reaching our goals is a process that may require a number of fits and starts.

Unfortunately for me, that means not even a beautifully rendered bullet journal Tetris board is sure to overcome the problem of habit boredom. (See also: The Surprisingly Easy Way to Change Your Habits and Your Life)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Ask the Readers: What Time Management Tools Do You Use?

Ashley Jacobs — Tue, 16 Apr 2019 08:30:10 +0000

Editor's Note: Congratulations to LaCinda, John, and mami2jcn for winning this week's contest!

It's easy to let things fall by the wayside when you're busy, but time management tools can help you organize your day and allow you to get things done. They can be as simple as a to-do list or a calendar, or they can be sophisticated apps or programs that run on your devices. The important thing is that they work for you.

What time management tools do you use? What are some of your trouble areas when it comes to time management? What routines or practices have been most effective for you?

Tell us about your time management tools and we'll enter you in a drawing to win a $20 Amazon Gift Card!

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Ask the Readers: What Is Your Favorite Productivity Tool?

Ashley Jacobs — Tue, 12 Mar 2019 09:30:21 +0000

Editor's Note: Congratulations to Kim, Paula, and Chrissy for winning this week's contest!

Getting things done can be really hard when distractions are coming at you from every direction. Fortunately, there are plenty of productivity tools out there that are designed to help you stay on track, from the basic to-do list to an app the monitors your web activity to the "silent mode" on your phone.

What is your favorite productivity tool? How does it help you stay on track through the day? What do you do to get (and stay) in the zone?

Tell us about your favorite productivity tool and we'll enter you in a drawing to win a $20 Amazon Gift Card!

Win 1 of 3 $20 Amazon Gift Cards

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Ask the Readers: What Do You Want to Get Done Before 2018 Ends?

Ashley Jacobs — Tue, 30 Oct 2018 08:30:15 +0000

Editor's Note: Congratulations to Lynda, Chrissy, and Dana for winning this week's contest!

Many of us started 2018 with a list of goals we wanted to accomplish by the end of the year. We're now only two months away from the new year — what's left on your list?

What do you want to get done before 2018 ends? How do you keep motivated during the final stretch? What goals have you already checked off this year?

Tell us what you want to get done before 2018 ends and we'll enter you in a drawing to win a $20 Amazon Gift Card!

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6 Ways to Stay Focused in an Open Office

Rachel Slifka — Tue, 03 Jul 2018 09:00:10 +0000

Believe it or not, open office layouts were created with good intentions. The idea behind the open floor plan is to encourage collaboration and teamwork among employees, rather than having walls that literally divide people. The design also helps companies save on the amount of office space needed to accommodate everyone. Individual offices take up much more space, and therefore cost companies more money to rent and fill.

While some people love working in an open office layout, it certainly isn't a fit for everyone. Some people thrive among the constant chatter and collaboration of coworkers, while others find it distracting.

If an open office setting is preventing you from accomplishing your to-do list each day, there are ways you can make it easier on yourself. Here are six simple ways to stay focused while working in an open office.

1. Get some fresh air

When the office is full of distractions, it is sometimes best to walk away for a minute to clear your mind. The best way to do this is to step outside for some fresh air. A deep breath of nature can restore the mind from the mental fatigue of work, allowing you to return to your tasks with a fresh perspective and decreased stress.

In fact, Steve Jobs of Apple was notorious for holding walking meetings in order to spend more time outdoors. (See also: 5 Bedtime Routines of Famous Financial Gurus)

2. Invest in headphones

Noise-canceling headphones are a lifesaver when it comes to eliminating distractions. Not only do they help drown out office chatter, but they also signify to others that you're trying to work. People tend to interrupt you less if they see that you're wearing headphones and are in work mode.

Further, research conducted Cornell University in 2016 shows that "streamlined" music can help improve your focus at work, and your mood — giving you all the more reason to crank your favorite tunes. (See also: This Is the Best Music to Listen to If You Want to Be Productive)

3. Establish boundaries

Perhaps the best open office survival tip is to establish boundaries with those around you. There's no shame in letting people know how you work best. You're there to do a job, and if the open office layout is becoming a distraction, it's up to you to find a way to make it work.

Block off an hour or two a day on your calendar that is strictly dedicated to working on your own. Share your calendar with others so they know when you are or aren't available. And chances are, you aren't the only person in your office struggling with the open concept. Lead the charge by creating an office plan of how to let one another know when you're busy. Perhaps you put a do not disturb sign up while you are occupied, or you ask everyone on your team to coordinate an hour of distraction-free work. Whatever the case, find something that works for you and your coworkers.

4. Ask for emails

How can anyone get anything done when coworkers are constantly stopping by or pinging you on Slack? The truth is, it's difficult for anyone to work with constant interruptions.

Fortunately, there's another form of communication can help prevent interruptions: email. Most things aren't urgent, so it's okay to ask your coworkers to email you instead of verbally asking you, or messaging you. By requesting emails, you can respond when it works for you and better establish your priorities. Plus, you can close your email when you're working to eliminate yet another distraction. If someone really needs to speak with you, encourage them to email you and setup a time to speak later in the day. (See also: 5 Easy Ways to Declutter Your Digital Life)

5. Find an alternative workspace

Sometimes, it may be impossible to accomplish your objectives in an open office atmosphere. If this is the case, talk to your boss about finding an alternative workspace to use when you seriously need to concentrate. Whether you need a private conference room for a few hours or the chance to work from home once a week, come up with a few options to present to your manager.

If all else fails, you can always ask to move to a cubical that faces the wall. These are often less distracting since you don't see everyone in the office while you work. (See also: 14 Reasons Your Boss Should Let You Work From Home)

6. Practice tolerance

After setting some established boundaries, your coworkers should better be able to accommodate your need for privacy. However, no one is perfect. Respect and tolerance goes both ways in the workplace.

While it might not be an ideal situation for you at all times, try to see the benefit of your office layout. Understand that no matter your work setup, everyone you work with communicates differently. By practicing tolerance, you can focus your energy back onto your work.

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How to Achieve Your New Year's Resolutions by the End of Summer

Toni Husbands — Fri, 22 Jun 2018 08:00:25 +0000

As another school year goes into the history books, and summer vacation is in full swing, there is an elephant in the room. What about all those goals you wanted to achieve back in January? Since close to half of New Year's resolutions are abandoned after a month, there's a good chance you've forgotten yours by now.

That's not to say your goals weren't grand. According to a YouGov poll, the top three resolutions in 2018 were to eat healthier, get more exercise, and save more money. Even though the year is half over, there's still plenty of time to check those boxes. Rather than store them away again until next January, let's harness the power of the summer and finish 2018 strong. (See also: 10 Financial Resolutions You Can Conquer Before New Year's)

However, doing the same thing and expecting different results is probably not the best approach. If you're serious about accomplishing your goals in the next three months, let's change tactics.

Break your goals into manageable chunks

The reason many of us lose focus is that our goals are very lofty. They're also not well defined. It can be hard to determine whether you've had success if your goal isn't quantifiable. And when we don't see instant results, our motivation can wane. Instead of focusing on that grand goal of weight loss or debt reduction, start with a smaller interim step.

Set a specific goal to exercise three times this week or drink two extra glasses of water every day. Now your goal is measurable and a feeling of accomplishment can be achieved, in short order. As time goes on and you achieve the smaller goals, you're likely to sustain the adjusted healthy behavior.

If you have a mountain of debt ahead of you, focus on tracking expenses to see where your money is going, and getting a written budget in place before each pay period. (See also: 5 Steps to Successful Budgeting)

These smaller tasks are manageable and easy to repeat regularly, but don't get ahead of yourself. Build up momentum during the days of summer so that you can turn this newfound focus into a positive long-term habit way before Christmas rolls around. (See also: 25 Bite-Sized Money Resolutions to This One Your Biggest Year Yet)

Find accountability partners

Use positive peer pressure as the secret sauce needed to remain vigilant. Whether that's an exercise partner, someone with the authority to pinch you anytime you reach for a cigarette, or a money club who meets regularly to discuss financial goals and priorities. We are not designed to live this life alone. So recruiting someone who can participate in your journey to goal completion can make all the difference.

Opening up to someone about things we feel less confident about can be scary. It's hard to be vulnerable and let others in on the big secret that we don't have it all together. The good news is that people in your life already know you have flaws. We all do. Exchange support with your friends and family members because they might need help dusting off and resurrecting their New Year's resolutions, too. (See also: This Trick Could Help You Finally Pay Off Your Debt)

Make your bed

Make your bed. Every single day.

That's what former Navy SEAL, four-star admiral, and former chancellor at the University of Texas — William H. McRaven — attributes to his success. He told USA Today, "There's a power behind making your bed every morning. Learn to do the little things well, learn to make your bed right. And that transcends into a lot of other things you do."

His book, Make Your Bed: Little Things That Can Change Your Life ... And Maybe the World, discusses his theory of how starting your day off by accomplishing a doable task, like making your bed, sets the tone for the rest of your day. When you have a sense of accomplishment early on, you create a sense of momentum that will build and help you tackle more complex tasks with gusto.

So give it a try. For the next three months, start your day by making your bed. See if that doesn't translate into significant progress toward completing those resolutions by Labor Day.

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Life-Changing Habits to Get More Done

Amy Lu — Tue, 20 Mar 2018 09:00:08 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on life-changing habits to get more done, what to pack for a long trip, and how to get rid of old furniture and other large trash items.

Best Money Tips: Use These Apps to Be More Productive

Amy Lu — Tue, 23 Jan 2018 09:00:08 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on apps that can make you more productive, tips for mindful consumption, and budget saving trends that don’t work.

Best Money Tips: How to Be More Productive in 2018

Amy Lu — Fri, 05 Jan 2018 09:30:06 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on ways to be more productive this year, how to turn exercise into a habit, and ways to be a more present parent.

Productivity

How Pre-Commitment Mechanisms Can Help You Resist Impulse Buys

Why do pre-commitments work?

What does a pre-commitment mechanism look like?

Social consequences

Automation

Remove temptations

When pre-commitments don't work

Know your temptations

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How to Keep Office Solicitations From Busting Your Budget

Perfect your "No, thanks!"

Know your workplace policy

Develop a personal policy

Never give at work

Only give in specific categories

Make a charitable budget

Pressure from management

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How to Use Budgeting Skills to Improve Your Time Management

Pay yourself first

Automate

Track your spending

Your productivity budget

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Ask the Readers: What Helps You Be More Productive?

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Why Behavior Nudges Don't Always Lead to Healthy Habits

Strong preferences

Incomplete nudges

Reactive behavior

Over-saturation

Nudges are the start, not the end

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How Too Many Small Decisions Can Cost You Big

The tyranny of small decisions

The latte factor

Easy payments and small decisions

Aligning your choices with your values

Forced value alignment

Don't let small decisions pile up

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How Habit Boredom Makes You Abandon Your Goals

Understanding habit boredom

Combatting habit boredom

Fall in love with the boredom

Embrace the process orientation

The double-edged sword of habits

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Ask the Readers: What Time Management Tools Do You Use?

Win 1 of 3 $20 Amazon Gift Cards

Giveaway Rules:

Ask the Readers: What Is Your Favorite Productivity Tool?

Win 1 of 3 $20 Amazon Gift Cards

Giveaway Rules:

Ask the Readers: What Do You Want to Get Done Before 2018 Ends?

Win 1 of 3 $20 Amazon Gift Cards

Giveaway Rules:

6 Ways to Stay Focused in an Open Office

1. Get some fresh air

2. Invest in headphones

3. Establish boundaries

4. Ask for emails

5. Find an alternative workspace

6. Practice tolerance

Like this article? Pin it!

How to Achieve Your New Year's Resolutions by the End of Summer

Break your goals into manageable chunks

Find accountability partners

Make your bed

Like this article? Pin it!

Best Money Tips: Life-Changing Habits to Get More Done

Top 5 Articles

Other Essential Reading

Best Money Tips: Use These Apps to Be More Productive

Top 5 Articles

Other Essential Reading

Best Money Tips: How to Be More Productive in 2018

Top 5 Articles