We all like to feel like we have control over ourselves and our actions. The alternative is just too frightening to imagine, but have you ever wondered how much of what we do is just a result of habit? I think we can all remember times when we drove back from work, got home, and had no idea how the heck we just got there. It’s not like we were asleep at the wheel, but our brains definitely were not active. But how often does that really occur? Research shows that up to 95% of our behaviors are a direct result of our habit cycles, with conservative estimates showing that habits control 50% of behavior. At best, we are on auto-pilot for half of our lives.
I think Mahatma Gandhi said it best when talking about the power of habits:
“Your beliefs become your thoughts,
Your thoughts become your words,
Your words become your actions,
Your actions become your habits,
Your habits become your values,
Your values become your destiny.”
For many of us, when we think of our financial journey, it is nothing but a series of poor decisions and stress. The more we make poor financial decisions, spend more than we make, buying things we don’t need, the more it becomes a habit. The stronger the habit, the harder it is to break, no matter if that habit is good or bad. Habits are neutral; they don’t play any favorites.
I love how Warren Buffett puts it. “Chains of habit are too light to be felt until they are too heavy to be broken.” So the obvious question that arises is how do habits work, and can we control them?
Habit Cycle —
The Merriam-webster dictionary defines a habit as “an acquired mode of behavior that has become nearly or completely involuntary.” Simply put, habits are our brains’ way of shortcutting information to be productive in life. Our brains take on an insane amount of data every second, and in order to decipher that information efficiently, it needs shortcuts.
The good news about habits is that they are predictable and follow a set pattern. James Clear, the author of Atomic Habits, does an excellent job detailing the habit life cycle in 4 steps.
Step 1) Cue
The cue is the trigger that tells our brain to look for a shortcut and initiate a behavior. Your brain is constantly searching for cues that will produce the rewards we value, such as money, power, fame, status, approval, love, friendship, and our more primary rewards like food and sex.
Since our behaviors are incredibly responsive to our environment, it is essential to control the cues that we surround ourselves with. We want cues that are obvious so our brain can’t miss them. For example, if you want to read more at night, a cue can be putting your book on the pillow in the morning.
Step 2) Craving
After every cue, a craving will follow. They create a sense of desire and act as a motivational force for our habits. Without these cravings, which produce desire, we have no reason to do anything or even get out of bed in the morning. The critical thing about cravings is that you are not craving the habit but what the habit gives you.
For example, you don’t want to watch tv; you want to be entertained. The craving you have is for the reward, and the way to get the reward is the habit.
Cravings are also unique to us. Sure, we can all share similar cravings for things, but we are all motivated by different things, and we all have our unique perspective that shapes the way we look at the world. The cues in our lives are meaningless until they have thoughts, feelings, and emotions from us behind them that turn the cue into a craving. For an overweight person, the sight and smell of a fresh-baked donut can trigger an intense need for the donut. For somewhere who is a bodybuilder, the donut might not be of interest and can simply walk right by it.
Step 3) Response
After our craving, we must respond, and thus our habit is born. Our response is limited by two key factors; motivation and ability. These are reasonably obvious limitations of habits, but they are essential to note.
If the habit requires more effort than the motivation you have, you will not do it. Simple enough. Similarly, if you are incapable of acting out the habit, you will not do it. No matter how much you want to go outside and run a marathon in 3 hours, you are out of luck if you don’t have the speed and physical stamina to do this.
Step 4) Reward
Finally, after we respond, we are rewarded. Our brain is a reward detector. Our brain is looking for things that increase pleasure and decrease pain. Every reward serves to satisfy a need and teaches our brain what to remember in the future. If a reward is favorable, it is remembered; if it is not, it is forgotten.
How to Control Your Habits
Now that we understand how habits are formed, we can now seek to control them. Every step of the habit chain must be strong, or the habit will break down and be forgotten. If there is no cue, your habit will not start. Reduce the craving, and you will not have the desire to respond. If the craving is there, but the response is too difficult, you won’t be able to do it. Without a satisfying reward, you will not do it again.
When the habit cycle is strong, the behavior will be repeated. In order to control our habits, we need to work smarter, not harder. We can break down each of the habit stages and find a way to produce good habits and eliminate bad ones.
Creating Good Habits:
In order to create a good habit, we want to maximize every step of the habit cycle so it gives us the greatest chance of repeating the desired habit.
We need our habits to be:
- Obvious (Cue)
- Attractive (Craving)
- Easy (Response)
- Satisfying (Reward)
Breaking Bad Habits:
Conversely, if we want to break a bad habit, we need our habits to be:
- Invisible (Cue)
- Unattractive (Craving)
- Challenging (Response)
- Unsatisfying (Reward)
Following the above steps gives us the greatest chance of continuing the undesired habit.
Habits are extremely powerful forces, and now that you understand them, you can master them. Here are a few helpful tips to take with you on your journey to self-mastery.
- Habits control at least 50% of what we do
- Habits follow a set patter of cue, craving, response, reward
- Focus on identity and giving yourself easy wins.
- Remember your habits rules
- Outcomes are not 100% in our control but who we are is always in our control.
- Stick with it! Habits will either control you or you can control them. You choose!
- As always, you got this!
