Individuals and habits are all different, and so the specifics of diagnosing and changing the patterns in our lives differ from person to person and behavior to behavior. Giving up cigarettes is different than curbing overeating, which is different from changing how you communicate with your spouse, which is different from how you prioritize tasks at work. What’s more, each person’s habits are driven by different cravings.
In Charles Duhigg’s book “The Power of Habit” he makes it very clear that change doesn’t happen fast and it isn’t easy, but with time and effort you can reshape any habit.
Over 57 million Americans don’t have an emergency saving fund. It is a myth that Americans can’t save. For decades we did. So why don’t Americans save today. Many theories exist as to why, but we would like to focus on one in particular, wealth and diversity, the culprit of Americans poor spending habits.
We have become a culture that only wants to live in the now. We would rather spend our last dollar to showcase the latest fashion trend, or have the latest technology than to think about our future. In a social media driven culture of global show-and-tell we now have more Joneses (I mean Kardashians) to keep up with than ever. But this approach has introduced terrible habits for individuals caught up in this phenomenon. Kim Kardashian has over 100 million Instagram followers while CNN has less than 4 million. We understand that Instagram or Snapchat or Twitter are forums for influencers and not necessarily news organizations or educational programs, but that in and of itself is the challenge. The influence of celebrities, sport figures, etc. create an unrealistic views to very impressionable minds.
The U.S. population is roughly 323 million. To put into perspective the power of athletes consider just how “exclusive” they are in the context of the countries overall population. The NFL has 1,696 players, the MLB has 1,200, the NBA has 420 and the NHL has 713. The four major professional sports employ just over 4,000 individuals. That represents 0.00124% of the U.S. population. But their influence is obviously many, many times greater. What kid wouldn’t be enamored by Antonio Brown’s Rolls Royce or Russell Westbrook’s fashion swag. How many young kid’s believe they will pay professional sports and make lots of money? Probably a lot more than we would like to acknowledge.
Evidence suggests that the prefrontal cortex of the human brain doesn’t reach maturity until our early to mid 20’s. The prefrontal cortex coordinates higher-order cognitive processes and executive functioning. Executive functions are a set of supervisory cognitive skills needed for goal-directed behavior, including planning, response inhibition, working memory, and attention. These skills allow an individual to pause long enough to take stock of a situation, assess his or her options, plan a course of action, and execute it. Poor executive functioning leads to difficulty with planning, attention, using feedback, and mental inflexibility, all of which could undermine judgment and decision making. Understanding this puts into context why young adults are so impressionable, they may not have fully developed the capability for decision making and judgement. An advertisers dream!
While we are also faced with the fact that everyone’s habits are driven by different cravings we have to try and impress in a similar way upon these young minds that good behaviors can be developed during this same time period. If we can influence the mind and form a positive habit, it is likely to sustain someone through the course of their life.
Back to Charles Duhigg, he proposes the following framework: identify the routine, experiment with rewards, isolate the cue and have a plan. Let’s say you have the bad habit of online shopping when your are stressed. You recognize that each time stress takes hold, you hop on your laptop and start to buy, buy, buy. But this time you decide to stop, you have racked up large credit card debts and you know you have to do better. A few days later, more challenges at the workplace and you fall right back into your cyber shopping bliss. You need to identify the habit loop. What is the cue for this routine? Job stress, relationship challenges, boredom? To figure out what cravings are driving particular habits, experiment with different rewards. Choose what to do instead of going online to shop. Create multiple rewards and track the success of trying something different when you get the urge to shop. Once you find the best reward for the routine then identify the cue. It is hard to identify cues because of so much going on around us at all times. Experiments have shown that cues fall into five categories: location, time, emotional state, other people and immediately proceeding action. So when you get the urge to shop write down where were you, what time was it, what was your emotional state, who else was around and what action proceeded the urge. After tracking for some period, some patterns should arise. Once you have figured out your own personal habit loop you can begin to change your behavior by developing a plan to make different and hopefully better decisions.
Each of you is different, so you will have to explore your own loop to try and change your behaviors and develop better habits.
The team at Divvy is dedicated to helping change habits and training the mind to become disciplined and responsible savers. We believe you can enjoy today without sacrificing tomorrow. #divvyupnow
Nearly half of Americans can’t cover a $400 emergency expense!
Nearly half of the people over 55 years or older have NO retirement savings!
Evidence suggests labeling can facilitate a process in which people place money into different mental catagories and are loathe to use it for purposes besdies the labeled one
John Beshears is Assistant Professor of Business Administration at Harvard Business School; Katherine Milkman is Associate Professor of Operations, Information and Decisions at The Wharton School of Business; Laura Burke is Manager of Policy Communications at Innovations for Poverty Action; and Alison Fahey is Policy Manager at J-PAL.