One Small Step At A Time

• March 27, 2020

One small step for wo/man, one giant leap for…

…creating better financial habits!

What good habits do you have, or wish you had? In business and our personal lives, a majority of our daily actions are completed out of habit without giving them much thought. Have you ever caught yourself driving and asking yourself did I stop at that stop sign back there? Or did I lock my car door after I parked my car? Or did I send that email I drafted? Those actions have become so familiar that they have become good habits that you do without thinking about them. We can do the same thing in the financial aspect of life. Not only must we create good financial habits personally, but we must also implement those good financial habits in business so our businesses can grow.

Our brains are wired for survival, which is why our brains ignore the familiar to focus instead on what’s new and different. That fact is referred to as “nose blindness.” I recently conducted a Behavior Change Bootcamp and helped my audience better understand nose blindness with the following example. Think of the last time you entered a room and smelled baking cookies, or homemade bread, or some other favorite aroma. Minutes later, your nose didn’t detect that aroma anymore. Yet if you left the room and came back again, you would smell it again. That is an example of how nose blindness works, your brain ignores the familiar so it can focus on the new and different instead. That helped survival rates back in the cave man-days. It is that exact understanding of how our brain works that we can leverage today to our advantage.

Let’s look at finance habits since money applies to all of us. Some of us may excel at staying on top of our business finances but not our personal finances or vice versa. Either way, if we can set things up so that we do certain activities so routinely that we don’t think about them, voila! we have a new habit! Whether we own a business, are employed by a business, or are retired, keeping our records organized and having an automated saving/investing plan in place is crucial for long term success. Knowing and being familiar with what we have in place is the foundation for all of our business and personal financial decisions. It’s especially important during emergencies and unexpected events as we are living first-hand right now!

So how do we leverage our brain to help us create better financial habits that can help grow our business? To avoid the feeling of overwhelm, we need to take James Clear’s advice from his book Atomic Habits and think small. His advice is to break our desired habits into 2-minute actionable steps so that by focusing on the system in place, one small step at a time, we end up achieving the overall goal. For example, business owners need to keep track of cash flow but monitoring it can often be procrastinated. Start small and designate just a few minutes at the end of each day on your calendar to track your income and expenses whether that’s in QuickBooks, some other software, or even manually. That way, you won’t feel overwhelmed at the end of the month, quarter, or year when it’s time to review the bigger picture to plan for the future.

If you pay the bills in your business, would someone else know what, when and how those bills need to be paid if you aren’t available to take care of it? Monitoring bank/credit card accounts to assure no fraudulent charges are occurring is also crucial. If you schedule small steps every day, to cross-train someone on various responsibilities or to monitor bank accounts, soon those steps will become habits, and those good habits you have formed will not only ease the stress on you, but also on employees which is also better for clients in the end. What small, 2-minute action step can you begin today to help toward your business goals?