COVID-19 has changed our experience of being a customer, an employee, a citizen and a human. These behaviour shifts will not change overnight and some have now become the norm.
“Well, COVID-19 has turned our routines on their heads. With regular routines thrown out the window, how likely is it that our lives have permanently changed and that our newly adopted behaviours will persist?” Daniella Bergman, communications manager at Allan Gray asks. Bergman remarks that a series of interviews run by BBC Worklife aptly notes that we have just undergone the largest behaviour change experiment in the history of humanity. The question is, which new habits will stick?
Bergman notes that there are countless recommendations from psychologists and life coaches on how to get a new habit to stick. Here are five ways of doing it when it comes to one’s finances:
- Focus on entrenching one change at a time: COVID-19 has forced many changes upon us; some may be easier to maintain than others. Pick one that is most important to you. If you plan to save spare cash made available as a result of a more contained lifestyle, make this your key focus. While lockdown level 5 may have enforced an extreme spending detox (yes, remember when only essential service providers were allowed to trade and we could buy very little more than the basics?), it also exposed our spending habits and taught us to differentiate between our needs and wants. Before slipping back into prodigal ways, now is a great time to bed down a proper budget – and focus on sticking to it.
- Identify your cue: A cue triggers your brain to initiate a behaviour. Pre-COVID-19, getting paid may have been your cue to go out and spend. COVID-19 may have broken this cycle and given you the opportunity to refocus this cue, making this your trigger to save. Commit to spending what you have after saving, and not the other way around. After a month or two of making your contribution to your savings or investment account before dealing with your other monthly expenses, you won’t even notice the dent in your disposable income. Even better, automate this response in the form of debit order.
- Identify the reward: The reward is the end goal of your habit. Focus on what you are adding to your life, not what you are giving up. If you have eliminated wasteful spend and made space in your budget for saving, this will result in long-term gain, even if you miss the frivolity. Creating financial security and building long-term wealth takes dedication; but your commitment to these goals will ultimately pay off. Start with the end in mind: Perhaps you are saving for your child’s education or a deposit on a home – keeping this “reward” in sight will make this activity feel less like a sacrifice. Consider contributing to a unit trust or tax-free investment account; small contributions compound and grow over time.
- Have a plan for when you get derailed: The unpredictability of life is one of the factors that make sticking to our goals difficult. Author-psychologist James Clear suggests that we need to plan for chaos; this will help us stick to new behaviours even when things don’t go according to plan. Clear advocates using the “if-then” technique. This entails planning ahead for what we will do if we hit a snag. When it comes to your investments, for example, having an emergency fund in place will prevent you from having to dip into your retirement savings if you lose your job. As we have all seen over the past year, we cannot predict what life has in store for us, and we need to expect the unexpected.
- Be accountable: Tell someone about the habit you are working to adopt; this will make it real and they will hold you to account. Talk your family through the new budget and get them on board or tell a friend or colleague about your goals so that they can call you out if they notice you straying off the path.