Atomic Habits: A Narwhal Book Review

This month we dove into Atomic Habits by James Clear to kick-off 2021. While some "self-help" books can end up motivating by guilt or feel patronizing, the team truly enjoyed the tone and methods Clear lays out in his book. More than a self-help book, this is a study into the absurdity of the human brain and how we create behavioral patterns that intertwine our emotional, mental, spiritual, and physiological bodies. We might be complicated, but creating meaningful change isn't nearly as difficult as we convince ourselves.

No matter what your goals for 2021 might be, they will all revolve around new habits. If you want to work out more, you need to make that a priority and schedule that in your schedule consistently throughout the week. Just saying, "I am going to work out daily" does not give you any accountability, specificity, or an exact way to break that goal down. If you can attach the new habit to something you already do without thinking, it becomes much easier to achieve. If you say, "I'm going to work out right after I brush my teeth," and you brush your teeth every morning at 7:00, then suddenly your goal has a plan and a clear path for the new habit to be formed. The same can be said for breaking a "bad" habit. Using the power of compounding small actions add up to a noticeable difference.

As it relates to your financial habits, it can seem restricting to become regimented in the way that you structure your finances. Monitoring every dollar that comes into or flows out of your account feels like it robs you of the ability to be spontaneous and spend money on things or experiences as they present themselves. Though it can feel that way, in actuality, a regimented financial approach has the opposite effect. The more regimented and particular you are about every dollar you make or spend, the more it frees you up to use the excess how you please. If you know every expense is covered, you've decided on the amount you want to save, and that amount is accounted for; the remainder can be used confidently on anything because you know that the primary aspects of your financial plan are covered. The seemingly restrictive structure actually ends up giving you freedom.

Three tips for creating positive financial habits:

1. "You do not rise to the level of your goals. You fall to the level of your systems."
   
   When it comes to organizing your personal financial picture, a clean, automated system is key. James Clear isn't ashamed to recommend that his readers put technology to use when automation is needed. Practically, developing your own financial system includes consolidating and organizing accounts, automating contributions and distributions, putting in a calendar reminder to check in on everything regularly. From receiving a paycheck to paying your taxes, the resources you have will flow through the entirety of your financial system, and it's key to develop a transparent and efficient process from A to Z.
   
   
2. Accountability is king.
   
   Clear makes a strong point that one of the fastest ways to develop (or destroy) a habit is to bring in a third party. Humans are inherently tied to others' opinions, and having a trusted friend or partner with oversight of your financial decisions can help immensely in directing our decisions. Some may seem this as intrusive, but it's all dependent on your goals and level of vulnerability. It could be as simple as asking a friend to remind you that you want to drink water instead of soda when you're out, or it could be as intricate as having your partner review your monthly expenses with you. Regardless of the level of depth, asking for support and accountability can often be the push we need just to start a simple pattern.
   
   
3. Make good habits easy.
   
   This one is tough because financial discipline rarely feels easy. However, Clear's point is that nothing kills a good habit, like making it really tough to start. He recommends that you start habits in very bite-sized chunks, as oftentimes we get caught up in the reward cycle and begin to increase the pace regardless. For those that struggle with financial discipline, this is key. If you're struggling to build your savings because you're going out to eat five nights a week, don't go cold turkey. It might work for some, but for most, you'll do great for the first week, and then the habit will return as you become disenfranchised with the required level of discipline. Instead, pick a more manageable goal like only eating out Friday through Sunday. You'll have to sacrifice for sure, but it's more than achievable to cut out two expensive meals, and you'll start to experience the positive feedback loop of saving money without being overwhelmed by a drastic lifestyle change.

In all things, don't let perfection cripple you. Small changes are better than perfection and build lasting habits. A new year makes many of us want to evaluate our priorities, goals, and (hopefully!) financial health. This book was an excellent launchpad for many of us to do just that. If you have any questions or would like us to help you build better money habits in 2021, let us know!

If you're a reader interested in checking out Atomic Habits, please email Luke ([email protected]), and we'll get you a free copy!