Habits shape our lives. But not all habits are created equal. Certain habits, known as keystone habits or cornerstone habits, trigger positive changes in other aspects of our lives.
In the book “The Power of Habit”, Charles Duhigg writes that if you focus on one keystone habit, other positive habits will be easier to put into motion.
Let’s say Jack is looking to start working out, eat healthier, drink more water, sleep eight hours a night, and stop smoking.
No-one can implement five new habits at once. However, if Jack chooses just one of the habits and commits to it solely, the probability of success in the other four habits is higher.
Let us say Jack starts with the easiest one – getting eight hours of sleep every night. After a few nights of sound sleep, he starts to have more energy and decides to start exercising. This leads him to drink more water and also eat better. After a few weeks he feels healthier and has more energy, so he decides to quit smoking.
As a bonus, in order to get a good nights sleep, Jack stops checking his phone after 6 pm.
All these things happened with one small habit of sleeping more!
The domino effect
Even seemingly small habits can be keystone habits.
For Admiral William McRaven, making the bed every morning as a Navy Seal was a keystone habit. Making the bed correctly set the tone for the day. No matter how hard and physically grueling the rest of the day was, he could be proud of the way it started. And the sense of accomplishment from that one small daily habit carried a positive tone throughout the rest of his day.
One of my keystone habits is writing a gratitude journal every morning. It offers a positive start to the day, enhances mindfulness, and helps with intention setting. It also helps me control wasteful spending
How does this relate to finance?
Keystone habits can be used to achieve financial goals. Take an example of a new college graduate – Jill – who wants to pay off her student loans. She also wants to buy a car to commute to her new job. And start saving money by keeping her spending in check. And start investing.
Being a reader of the blog, she also wants to build up a Go To Hell fund.
All of this sounds overwhelming. It is difficult to focus on so many things at once. As they say – if everything is a priority; then nothing is a priority.
So Jill starts with just one habit – saving 20% every month. Even better, she puts an instruction in her bank app – so that 20% of the paycheck is automatically transferred to a savings account every month.
Now she does not have to worry about her spending habit. She can spend the remaining part of her paycheck without any guilt. Also her automated saving allows her to slowly pay down her student debt and build up money to buy a second-hand car.
Jill also does not have to worry about the Go To Hell fund either – she knows that in three years she will have enough money for that.
Just doing one thing – saving 20% – helps her with all other areas of her financial life.
In Conclusion
Keystone habits are the foundation upon which a successful life can be built.
In the face of numerous financial goals, it is natural to feel overwhelmed. However, the key is to focus on just one keystone habit that has the potential to impact other areas of your life. By dedicating yourself to this single habit, you create momentum and a compound effect, making it easier to embrace additional positive changes.
So, don’t be discouraged by the multitude of goals; choose one keystone habit, start with that, and watch as it paves the way for a financially successful future.