Just like anything in your life, managing your personal finances comes down to having good habits. Spend below your means. Make payments on time. Focus on needs, not wants. But, like most things, all of that is much easier in theory than in practice. Keeping good habits is tough. That’s where habit stacking can come in and change your life and finances

What is habit stacking?

I first heard about the concept of habit stacking from author James Clear. I’m all about self-improvement, but there have been small habits that I just couldn’t seem to keep like flossing or remembering to moisturize (which as I get older is more and more necessary).

Through habit stacking, though, I’ve been able to change that. According to Clear, “Habit stacking is a special form of an implementation intention.Rather than pairing your new habit with a particular time and location, you pair it with a current habit.”

So instead of saying I’m going to floss every night at 9pm, you’d stack flossing with another habit like brushing your teeth. Naturally, that sequence of events makes sense, but it’s about creating the pattern in your mind. 

Clear says the habit stacking formula is:

After/Before [CURRENT HABIT], I will [NEW HABIT].

I’ve been able to use habit stacking to optimize my morning and evening routines.

For example, in the morning, I immediately start my day with two glasses of water and some apple cider vinegar. After all, I’ve been sleeping for 8 hours and my body is dehydrated. Me adding the health kick of apple cider vinegar reminds me to take my vitamins and supplements. After that, I make my coffee and while the coffee is brewing, I clean the cat litter. 

Doing all of these things in this order flows naturally and has created a pattern in my mind. The water seamlessly reminds me to take my vitamins. Then, as a full-fledged coffee addict, I need something to do while waiting the 4 minutes to drink my cup of joe. Cleaning the cat litter is a necessary though not fun task that needs to get done.

In the evening, I know I need to brush my teeth before bed. For years, I had trouble being consistent with flossing. But I created a pattern in my brain, “After I brush my teeth, I will floss.”

So now I have a three-part system and brush my teeth, floss and then use mouthwash. Once I’m done with my oral hygiene, I wash my face and moisturize and am ready for bed. 

All of these things are simple but can be tough to stick to. But if you pair your habits to create a specific pattern, it becomes second nature and easier to stick to. Though I’ve used habit stacking primarily to optimize my morning and evening routines, you can also use it to transform your finances

How to get started with habit stacking 

The book Habit Stacking: 97 Small Life Changes That Take Five Minutes or Less by S.J. Scott outlines the eight parts you need to successfully habit stack. They are:

1. Each Habit Takes Less Than Five Minutes to Complete

2. It’s a Complete Habit

3. It Improves Your Life

4. It’s Simple to Complete

5. It Takes Less Than 30 Minutes

6. It Follows a Logical Process

7. It Follows a Checklist

8. It Fits Your Life

So, think about what habits you want to implement in your life, and create a checklist so they follow a certain order. Make sure it’s a logical progression, which will make it easier to keep.

Ways to habit stack your finances 

I used to feel inconsistent with checking my financial accounts and typically only did so when I needed to. Now once a week, I follow a specific checklist and order that gives me a snapshot of where I’m at. 

So, before I might just check my personal or business checking account. Now, I:

  • Look at my personal checking and savings account
  • Check my business checking and savings account
  • Log in and look at my credit card account
  • Check my PayPal account
  • Do a quick check of my investment accounts

While this may sound like a lot, it takes me less than 10 minutes. The goal of doing this is to see where I’m at financially with my balances, where my spending is at on my credit card and to quickly review transactions for any errors. This structure has greatly streamlined my finances. 

In the past, when I awoke in the morning, I’d grab my phone and immediately log-in to my bank’s app to check transactions and my balance. You can do that too. Instead of scrolling immediately through Instagram or Facebook, you can rewire your brain to check your bank account every morning when you grab your phone. 

Another thing you can do to habit stack your finances is after every time you open up your wallet, you count your cash. Doing this every time you open your wallet will give you a better understanding of how much you’re spending each day and how quickly it’s leaving your wallet. 

When you walk in the door, and it’s time to put your purse or wallet away, collect your spending receipts for the day and your loose change. Put the loose change in a jar for a rainy day and track your spending through your receipts.

Before going out of your house, you can turn off all your lights and heating to lower your utility bills

Every time you get paid, let that be the basis of other habits. For example, when you get paid, you can transfer money to savings, transfer money to investing, or pay off your credit cards.

When it’s time to purchase anything online, do a quick search for online shopping codes or discounts. 

At the end of the year during tax time, do a quick audit on your insurance to see if your coverage still works, and review your expenses to see if there’s anything you can cancel.

Any time you save money through a coupon or discount, automatically put the amount you saved in a savings account. 

The key is to build one habit on top of another so it feels natural and sequential. Habit stacking can transform your finances and your behavior so you’re more aware of your money. 


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