The science of spending

Forming good habits and breaking bad ones might be easier than you think.

It can often seem hard — even impossible — to learn and then stick to good spending habits. But what if there was a successful process rooted in science and not merely hope?

In his seminal bestselling book, Atomic Habits, James Clear outlined a scientific approach to habit formation. His findings are backed by serious research, including a study published in the European Journal of Psychology that found it takes 66 days on average for a new behavior to become automatic.

Depending on the specific habit, the person and the circumstances, however, it could take anywhere from 18 to 254 days for new habits to form.

Clear explains that habits are merely shortcuts for productivity and improving your life. And while the process may take a while, the rewards can be well worth the wait.

Here’s an overview of the four habit formation stages he outlined and how you can use them to help both manage your spending and increase your savings:


Stage one: “Cue”

The cue triggers your brain to start a behavior. It does this by predicting or visualizing some new outcome, such as finally being able to afford that new car or spending less on eating out.

The “cue” is where real change is born — the point when you decide to take one of your dreams or ideas and turn them into reality.

  • Watch out: Don’t overload yourself with too many ideas. Start with one at a time and then continue to expand as you go along.
  • Build on: Find something simple from your everyday life and visualize a modest, attainable objective. You might commit to fewer lattes each week or putting some of your monthly paycheck into a savings account. Once you can see progress it’ll be easier to maintain the habit and commit to the new behavior.


Stage two: “Craving”

Now that your brain is aware of the reward associated with your cue, a craving naturally follows. However, what you crave is not the new habit, but the outcome it’ll create. For the habit to take hold, you need to crave the desire to follow through.


  • Watch out: This is where you’re at your most vulnerable, so do your best to resist changing your mind. The longer you can stick to your habit, the better your chance of success.
  • Build on: Make a list of the things you’ll be able to do with your increased savings and focus on the end result. Start associating the new habit with what you’ll gain instead of what you’ll give up.  


Stage three: “Response”

This is the habit in action, the real-life execution of your cue. How committed you are to change and how attainable your desired habit is will ultimately determine your success. A habit will only form if you’re capable of doing it.


  • Watch out: If your goal still feels too big, it’s okay to cut back. Put less into your 401(k) at first or treat yourself to a weekly meal at your favorite lunch spot. It doesn’t matter how fast you move forward, as long as you keep moving.
  • Build on: Conversely, if you’re doing well with your new habit, try adding more to your final objective or find new ways to save.


Stage four: “Reward”

You’ve now satisfied your craving and a solid habit is formed. More importantly, your reward teaches your brain to embrace new cues and seek more rewards as you go forward in life. 


  • Watch out: This isn’t the end but the beginning. Make sure you continue your new habits so you can reap those rewards.
  • Build on: Now that you know you can do it, what other habits can you create? The opportunities are endless.


No matter your objective, you can use these steps to remind yourself that your financial goals are possible. Whether it’s trimming your budget to get your spending in line or opening a savings account to pay for a new home, you already have the tools you need to make your dreams come true.

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