Personal finance rests on a bedrock of choices. Each day, we're faced with thousands of little decisions, many of which have financial implications. Our ability to consistently make good decisions plays a huge role in whether or not we achieve financial success.
For example, when you're at the grocery store, do you consistently choose only the foods you need, or do you find yourself loading the cart with unnecessary items like cookies and chips?
Another example: When you're out with friends, do you keep control over your wallet or are you tempted to go to expensive restaurants?
Life is filled with choices like these – and many others. Here are five techniques you can use to make sure you consistently make good decisions that help your long-term financial goals.
1. Start your day with a reminder of your goal. A new day is filled with fresh opportunities to work toward whatever goals you have set for yourself in life. There are few better ways to keep working toward that goal than to remind yourself at the start of each day.
For some, a visual reminder works well. For others, a written reminder is more powerful. The key is to make sure you see that reminder early in the day, before you've started making decisions. An automated text to yourself in the morning is a great way to make this happen.
For me, the strongest reminders I have of my financial goals are my children, who serve as living reminders in the mornings.
2. Plaster visual reminders of your motivation. What motivates you to make better money choices? Often, this is merely a visualization of whatever it is that you'll obtain if you succeed at your goal. Perhaps it's your dream home. Maybe it's a thriving small business.
Whatever your goal is, find a visual reminder of that goal and plaster it in several places you look in a given day. Attach one to the bottom of your rear view mirror. Put one on your bathroom mirror. Set one as your desktop wallpaper on your computer and as the background on your phone.
My favorite technique is to take a picture of my children and wrap it around my credit cards. In order to actually use my card, I have to remove it from the picture of my children, which virtually requires me to look at them and think about them for a moment. This, in turn, pushes me to second-guess my choices.
3. Perform decision-heavy tasks that involve money early in the day. Decision fatigue refers to the mental wear that results from being inundated with decisions. In the modern world, decisions come at us all the time, and thus, by the end of the day, many of us are simply mentally worn out from all the decisions – making us more susceptible to making poor decisions.
The best way around this is to front-load your day with decisions that have a financial impact. Pay your bills and make financial choices early in the morning when your mind first starts clicking well. If you simply can't perform some tasks until later, push some of the decisions earlier in the day by making shopping lists or meal plans.
The goal is to minimize the number of decisions you have later in the day that involve financial choices so that you're less likely to make a poor decision while in a mentally tired state.
4. Alter your commute and daily routines to avoid common temptations. For many of us, our daily routines are filled with temptations and decisions. We drive by a coffee shop or a drive-thru restaurant, and we're tempted to stop for a treat. My weakness is bookstores, as I am almost magnetically pulled to their doors when I see them.
My daily commute took me directly past several highly tempting shops, meaning that each day I would entertain the thought of stopping there. That simply added to the decision load and the possibility I'd stop and spend money on something I didn't need.
The solution to this problem is to simply change your commute and other daily routines. I found a new way to drive home that took the same time as the previous route and didn't take me near bookstores and coffee shops.
5. At the end of each day, think about the positive choices you made. The thoughts we have at the end of the day often set the mood for the unconscious thinking we do while sleeping, so it's worthwhile to think about the positive moves you made during the day as you're getting ready to sleep.
Not only does this fill your nighttime hours with positive thoughts about your behavior, but it also helps reinforce financially positive moves.
Surrounding yourself throughout the day with decisions and thoughts that point you toward financial success is a sure way to make that financial success come to fruition.
Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.